All Ords Index : Retraced last week and challenged the 5,700 support level. Prices are now trading under the 20 day moving average which has turned slightly downwards. A further pullback to the 5,700 is possible before we see a resumption of the up-trend. The index is still trading well above the longer term 50 day moving average.
Domino Pizza (DMP) : looking for a breakout from the upper trend-line.
M2 Group (MTU) : resistance breakout and new high, well supported by the 20 day moving average.
Mantra Group (MTR) : Ascending triangle resistance breakout for a strong technical pattern long trade possibility.
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 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.
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The chart below shows it’s share price over the past seven months. The downtrend was broken in mid June with prices consolidating above the 200 day moving average. Over the past fortnight the price has retraced to form a bullish wedge. Yesterday saw a bullish candle breakout from the wedge pattern. This is my signal to enter a long position trade.
On this setup I will look to go long at a price of $168.00 with a stop-loss under the wedge low of $166.00. My initial target will be the resistance high from March of $175.00.
Shares in the social media giant Facebook (FB) increased 4.6% at the close of trading on Tuesday. This increase was on the back of the announcement a PayPal head will join the company to head it’s messaging products division.
The share price below shows the recent price action with a strong breakout from recent congestion. The breakout occurred on relative strong volume which adds to the bulls conviction to rise the share price.
Traders can look at entering a long position with a target price close to the March high of $72.00. Stops can be placed under the most recent congestion low of $62.00.