The XAO this week, retraced any ground made up last week. Alot are wondering if the is a sign of the bull run ending.
The short term trend is still up and this has not yet been broken. The two significant Moving Averages (MAV) have crossed over to a bullish indication. It currently sits on an area of four major supports. A weekly support line, a six month up trend line and two MAVs. This is showing the odds are stacked in favour of a rebound and trend continuation next week.
However, there is a small head and shoulder pattern on the daily chart which is a bearish signal if the neckline is broken. If the head and shoulders pattern was confirmed it would be in the opposite direction to the current trend. This makes it less likely to be confirmed, but is still a possibility.
For the moment the charts are still indicating bullish.
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Posted by admin on July 3rd, 2009
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Alot of stocks with in the financial sector have broken higher in recent weeks. Nab ha remained in a trading range of $20.00 to $22.00 since the beginning of March.
A stock cannot stay in a trading range permanently. Usually the longer the stock stays in the trading range the stronger the breakout. NAB has not only been in consolidation but squeezing in tighter in the last few weeks. With all this pressure, the breakout is likely to be strong.
After buyers managed to break out of the 18 month down trend, a higher peak (bullish) was formed as NAB went into consolidation. The strong break out and consolidation pennant are a flag pattern that has a bullish projection target of $30.00, however there is a significant resistance line at $25.00.
Should NAB break up from the consolidation at conservative target of $25.00 could be reached.
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Posted by admin on July 1st, 2009
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When considering a position in the Market, know if the buyers or the sellers are in control, is key. Technical Analysis techniques can help us determine who has the control.
Peaks and Troughs is a very powerful tool to use when looking at who is in control. Higher Peaks and Higher troughs tells us the buyers have control as there are new highs (PEAKS) being made each rally. And on each pull back the low (TROUGH) is higher than the previous low.
Keeping an eye out for a change in role can keep us out of a turning market and help to change our view early on in the new move to take full advantage.
JHX chart has recently indicated that the sellers are losing control and the buyers are coming in stronger. The buyers have been able to push through the previously respected down channel in late March. This also created the first higher peak. Now there is a pull back in play. If the stock rebounds off the channel’s top trend line and support at $3.80 which also happens to be the 62% fibonacci retracement, a higher trough will be created. This is confirmation the buyers have taken control and the stock is likely to see at least the previous high at $5.15 or next resistance at $5.50.
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Posted by admin on June 23rd, 2009
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TOL has been making consistent Higher Peaks and Higher Troughs in a channel since the beginning of March. Now at a significant support what could be the next possible target for this stock?
A potential Double Bottom could forming on the $6.45 weekly support line. Should this be validated with another Higher Trough it is likely TOL could head to at least $7.50 which is the next resistance level in conjunction with the overall down trend.
If the Double Bottom fail a retest of the next support level down at $5.85 is likely.
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Posted by admin on June 16th, 2009
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April saw the XAO break the 12 month down trend. Where is the next significant resistance we are likely to see a pull back.
After breaking through resistance at 3700 and the 12 month down trend, the XAO has now formed an up trend channel. The next major resistance is an intersection of the over all bear trend that started in October 2007 and a significant resistance line on the weekly. This intersection meets at 4250. It is likely this resistance will be retested and there maybe a pull back. A breach of this will see 4700 as the next resistance and possibly the confirmation of a Bull Market.
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Posted by admin on June 15th, 2009
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OST has been pushing up with higher troughs since the beginning of March but has failed several times at $2.80 resistance.
Today saw a close above the $2.80 resistance off a Higher Trough, indicating the bulls have control and enough buying power to push past resistance. It is likely OST will retest resistance at $3.35. Should the break out fail a retest of the uptrend line at $2.50 is likely.
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Posted by admin on June 11th, 2009
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This week saw the XAO break through the 3900 resistance and consolidate on top as support.
With the two significant Moving Averages (MAV) coming into cross and a Higher Peak now above the two it is likely there is alot more bullish action to come.
A Higher Peak and Higher Trough above the Two Moving Averages when the cross with be firm confirmation the bulls are in control.
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Posted by admin on June 7th, 2009
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In March I discussed the shifting of ANZ from bearish to bullish. ANZ this week has shown confirmation that the buyers have taken control after 18months of the bears dominating.
For 18 months ANZ has been in a strong down trend channel. In March this channel was breached and ANZ ran to the next resistance at $17.50. From there the stock retraced 50% to the support level at $15.00. This support is now being validated by the bounce.
ANZ has now made the first set of Higher Peak (HP) and Higher Trough(HT) above the down trend. This is confirmation Buyers have taken control. It is likely $17.50 will be retested. If breached $19.50 is the following resistance that could be tested.
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Posted by admin on June 1st, 2009
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How do Stock Prices Work?
When you buy stocks, you have two ways to make money. You can make money through dividends that the company pays for each share you own. For example, they might pay 25 cents per share each quarter. Dividends are not guaranteed, though.
Capital gains are another way to profit from stock purchases. You buy the stock at one price and at a future time, whether it’s in an hour or in 20 years, you sell it for a higher price. After you take the difference, the amount you sold it for over the amount you paid is a capital gain.
When investors purchase stock, they are doing it in hopes of making capital gains. Those in retirement usually look for dividend paying stock because it is a stable source of income. Otherwise, dividends are just a bonus to the investment.
In order to make capital gains, the stock price has to go up. The stock price can go up or down. It varies from day to day. How can you know it will go up and how exactly does it change?
Stock prices are affected just as the price of anything else changes. It is purely economics. Try to think back to your high school economics class when you learned about supply and demand.
It’s all based on whether supply and/or demand go up or down and buy how much. An increase in supply will lower the price whereas an increase in demand will increase the price.
The price of a stock will go up if there are more people wanting to buy than willing to sell. The price of a stock will go down if there are more people wanting to sell than there are willing to buy.
Once you understand supply and demand, you can understand how to make capital gains. You should try to purchase stocks that you feel will be a very popular buy in the future.
Posted by admin on May 18th, 2009
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The XAO has now confirmed 3900 resistance from 2005 to still be valid.
By respecting the resistance this week, a powerful Japanese Candlestick Pattern has formed. The Dark Cloud Cover. What is a Dark Cloud Cover?
The Dark Cloud Cover Pattern is a bearish reversal pattern, found at the top of an uptrend. It is a two-candle pattern where the first day shows a bullish green candle continuing the uptrend. The second candle opens higher than the previous day and pushes lower and closes below the open price, bringing with it the potential of breaking the upward trend. The key requirement for the Dark Cloud Cover pattern is that the bearish day closes at least half way down the previous day’s candle.
If we look over the last 18 months, there have been 3 other Dark Cloud Covers formed at major resistances. Each one has produced a significant drop in the immediate weeks following. Do we have a drop coming after such a strong bull run?
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Posted by admin on May 15th, 2009
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