S&P500 Index: The index tracking the major US listed stocks is currently trading in a range bound by resistance of 2,120 and support at 2,040. Over the past few weeks the index is converging and forming a triangle. Reporting season is likely to provide future direction with better than expected results likely to push the index higher but disappointing results could see the index break lower below the support level.
RPC Inc (QEP) : the share price has formed a bottom reversal inverse head and shoulders with a confirmation of the pattern yesterday with a breakout out above the neckline.
The Dow Jones Index nudged higher on Wednesday with a small gain of 15 points (0.08%) to close at 18,224 points. The S&P500 index which is the broader US market index made a slight loss losing 1.6 points (0.08%) closing at 2113 points.
Volatility was low with a narrow trading range for both indexes indicating a slight pause from the recent strong up moves with the charts showing the formation of small candles in yesterdays trading. The Dow Jones Index below shows the resistance breakout has continued to push upwards. The support level sits at 18,103 points.
Pfizer Inc (PFE) : Flag breakout overnight on good volume
Charter Communications (CHTR) : Breakout from ascending triangle
SM Energy (SM) : Early up-trend with a bullish candle resistance breakout
If you have any questions on any of the charts above please feel free to contact me.
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.
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.
The Goldman Sachs Group, Inc. is global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.
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 Apple have enjoyed a rise in prices for the past few months. The rise in prices has formed an up-trend with a recent retracement forming a trend channel.
The share price had a bullish breakout from the channel on Friday. This provides my trigger to enter a long position. I will look to enter somewhere in the region of the real body candle from Friday (approx $91.00). My stop will be placed under the most recent pivot lows in the region of $89.50.
Tesla Motors, Inc. designs, develops, manufactures and sells fully electric vehicles and advanced electric vehicle powertrain components. It provides services for the development of electric powertrain components and engages in the sale of electric powertrain components to other automotive manufacturers.
The share price for Tesla increased 8.81% on Monday on the back of positive news from the company that it’s long anticipated electric car Model X SUV will be delivered in early 2015.
The share price managed to breakout from its recent trading range and through recent resistance on higher than normal volume. I expect the bulls to come in and push prices higher with targets close to the March highs of $260-$265.
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.