The U.S. stock market pushed higher on Tuesday, nudging the Dow Jones industrial average and Standard & Poor’s 500 index to new all time highs. Overnight the Dow Jones index rose 92 points (0.51%) to close at 18,209 points with the S&P500 index putting on 5.82 points (0.28%) to close at 2115 points.
The chart below shows the Dow Jones index pushing through late December 2014 resistance on Friday with further follow through in yesterdays trading. Technically the resistance level of 18,111 points should provide short term support on any pullback.
A similar picture is noticed with the broader market index of the S&P500 chart below. It managed to breakout from the December 2014 resistance much earlier than the Dow Jones and has continued to push higher. Again the technical support level on any pullback should be at the resistance level of 2,093 points.
Broadcom Corp (BRCM) : Breakout from a flag with support at $44.15
Mbia Inc (MBI) : breakout from the downtrend-line and inverse head and shoulders
If you have any questions on the charts above please fell free to contact me.
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.
strong gains over the past six trading sessions sees it coming in close proximity to resistance. The buying has been on low relative volume so the rally may pause at 5520 points before market direction is re-established.
breaking out from the bullish pennant.
Ramsay Health Care (RHC)
any weakness should find support at the resistance breakout level of $56.30.
TFS Corp (TFC)
bottom consolidation forming an inverse head and shoulder. Looking for a breakout over $1.55
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.
The Australian Sharemarket lost ground last week and retraced slightly. From a technical perspective the index reversed at the resistance level of 5520 which was established from the peaks of April May and June as seen on the chart below. The current support level sits at 5420 which was formed by the pivot low seen in August. If the index falls through this price level then we could see the index price falling all the way back down towards the support level of 5360 which formed the base of the trading range seen from April to July. Clearly for the index to push higher it will need to break through the resistance level of 5520.
CORPORATE TRAVEL MANAGEMENT LIMITED (CTD)
The chart shows a nice up-trend in the share price with a breakout from the pennant formation on Friday. Volume was good which indicates the breakout has momentum. Short term traders could look to enter on Monday within the boundary of Friday’s breakout candle with stops under $9.50.
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.