This chart was shown in my blog on January 5th indicating a breakout from the flag was imminent. The chart below shows the breakout was successful.
Magellan Fin Group (MFG)
This was another share mentioned in the January 5th report suggesting that a a breakout from the pennant was a possibility. On Friday there was a clear bullish breakout on good volume. My trigger signal for an entry has been achieved. I’ll be on the look out for an entry on Monday trading.
This share is in a strong up-trend. Friday saw a breakout from resistance.
The US market has retraced over the past few weeks after reaching all time highs at the end of last year. The S&P500 index below shows this retracement with the price just holding above 2000 points. Further decreases lower are possible with the support level of 1972 in close vicinity which may hold further declines.
Newmont Mining (NEW)
Bottom consolidation with a possible double bottom formation. I’m waiting for a breakout above the resistance of $20.50.
Monster Beverage Corp (MNST)
Ascending triangle and it’s trying to breakout above resistance. This will be my long trigger signal.
Home Properties (HME)
Long setup with a resistance breakout on good volume. Stops can be placed under the recent support of $65.50.
Extra Space Storage (EXR)
Long setup with a resistance breakout on good volume. Stops could be placed under the most recent pivot low of $58.50.
The Australian sharemarket has rallied over the past two days but the short term trend is still bearish. The 20 and 50 day moving averages are trending down with the price trading well below the averages. I see resistance being met at 5350 points which is the horizontal support level of April to June which should turn from support to resistance. Last weeks rally was held up by the 20 and 50 day moving averages and it is likely that this will happen again.
Sirtex Medical (SRX)
Despite the bearish chart of the All Ords index above there are still shares in the top 300 stocks that are showing bullish technical charts. Sirtex Medical is in a very strong up-trend. A recent trading range formed with a bullish breakout candle today on above average volume. I will be looking for a slight pullback to the resistance price of $27.50 to enter with my stops placed under $27.00.
The Australian sharemarket had another bearish day with the index losing one percent. In yesterday’s article I showed the index was trading at the support level of 5350 and that this would prove an important level for future price movements. Today’s losses resulted in the index penetrating this support level and closing at its lows and in the process forming a long bearish candle.
The 20 day moving average has crossed below the 50 day moving average which is another bearish signal. Looking forward it is possible that the bearish sentiment will continue and the next support level of 5120 comes into range. In my opinion the market is headed lower in the medium term. Any rise in prices is probably going to be met with resistance at the August pivot low of 5420.
At this stage I am staying clear of any long position trades on the Australian sharemarket and have therefore not provided any trade suggestions for specific shares.
Australian shares have fallen for the third day in a row. The technical’s show that the index fell straight through the support level of 5420 and closed at it’s low today of 5352. This level was the support low seen in April to June. If the price falls through this price level then it is likely to signal further weakness and the index could then begin to fall all the way down to the low’s seen in mid October.
In contrast the US markets are continuing it’s bullish run with the S&P500 index making a new high overnight. It is clear that the Australian market is trading independently of the larger US market and is failing to follow it’s lead. This may signal that investors and traders are bearish about Australian market conditions and see better value in other markets. A pull back in the S&P500 index is likely to be supported at the resistance level of 2020 points.
I am neutral at present and not entering any long trades on the Australian market until I see evidence of the support level at 5350 holding and retracing above 5420.
Overseas markets ended the previous week on a high with both the Dow Jones Index and the S&P500 index closing at all time highs on Friday. This was achieved on the back of the surprise announcement from the Bank of Japan to increase its stimulus program which includes an increase in its purchasing of Japanese Government Bonds and exchange traded funds.
The other stimulus to the US markets has been the better than expected third quarter earnings report. So far 70% of stocks have reported their 3rd quarter earnings and more than three-quarters of these companies have reported above analysts estimates.
The major indexes have now rallied from the September and October correction and have pushed to all time closing highs. I for one was expecting the resistance levels to hold in the short-term but bullish momentum has easily pushed beyond these technical levels.
The chart for the All Ords Index does not provide as bullish a picture as that of it’s US counterparts. Clearly further bullish movement on the US markets will continue to push the Australian markets higher but the All Ords Index is likely to meet resistance at 5670 points as shown on the chart below and it would not surprise to see a reversal at this price level.
One stock from the Australian market to look out for is that of NEXTDC (NXT) as charted below.
The stock was in a strong downtrend over the past 12 months with a breakout from the downtrend in late October with the subsequent appearance of a higher high and higher low to signal the start of an early up trend. The 20 and 50 day moving averages have also formed a bullish cross. I will have this on my watch list and will look to any retracement as being a potential to enter on the long side.
Welcome to my first blog for several months. I took a few months off from trading to work on my trading plan and to focus on fine tuning my exit strategy. It ended up occurring at an opportune time with the markets dropping heavily in the months of September and October when I was not invested in any trades. As a trader I think it’s good to have a break from trading and to sit back and see how the market behaves without the emotion involved in holding trades.
Looking at the Dow Jones Index and the S&P500 index below it can be see that the markets were heavily sold off in late September and into October. The markets have since rallied from mid October and are closing in on the first resistance levels as depicted in the charts below. After such a strong rally prices may start to blow off and sellers may be tempted back into shorting positions with buyers also off loading long positions.
At this stage I am going to be sitting on the side-lines until either the first resistance level is overcome with the more likely scenario being that I will not enter the markets again until all time resistance in both the Dow Jones and the S&P500 is cleared.
I look forward to providing more regular blog articles in the coming weeks.
It’s been a mixed bag of trading results for me over the past few weeks. I was long several US listed CFD’s but was stopped out last week after the large bearish correction day last Thursday when the Dow Jones Index fell over 300 points (1.8%) to take out the short term support of 16,800 points. Over the entire week the Dow Jones fell 2.75% (467 points) to close at 16,493 points. Many traders with long positions would have seen their stops hit last week and much of the current market commentary on the internet talks of a market correction due to overvalued stocks and excessive market bullish momentum.
The first chart below shows the bearish candle which formed on Thursday July 31st. This candle took out the support level of 16,800 with ease with the next three trading days showing little resistance to further declines. I see the index falling further towards the next support level of 16,350 before the market perhaps pauses at this level. Any rally from current levels is likely to find resistance at 16,800.
Moving out to the 12 month chart below shows the index in a broad up-trend. The interesting point to observe on this chart is how the 200 day moving average was able to support the price on previous retracements in October 2013 and February 2014. The index price is getting closer to the 200 day moving average again and it may just find support here and use it as a springboard to resume it’s up-trend as it did previously. The 200 day moving average sits just below the 16,350 price area which also happens to be the next horizontal support level as seen on both of the charts.
At this stage I am not entering into any more trades and will happily sit on the sidelines until the market direction is confirmed.
Sirius has moved into an early up-trend and has paused at $3.50 which is acting as resistance. Positive earnings reported on Tuesday could look at pushing the share price through this resistance to continue the up-trend.