[CRYSTAL BALLING - JUNE 2ND - 6TH]
I will continue to look at swing plays this week after last weeks successes. A few good plays this week, but the volatility amongst them is low so the profits won't be as high - but it's consistency I'm after this week.
First up I would just like to focus on the airlines BAY and EZJ. These are both at trend resistance points combined with good indicators. Keep an eye on the oil price and a break of these trend lines for entry points.
Are the airlines ready to breakout?
I would also like to add that I think we may be beginning to see the bottom of the plummeting prices in the banking sector, in particular with RBS and BARC which look the best of the bunch.
In RBS we are seeing constant drops after the rights issue, but these drops lost momentum by Friday and formed a very short term double bottom. There is heavy negative divergence in the MACD indicating a turn around, which the stochastics are oversold but not yet ready. Watch 222-225 for support in RBS with 235 another significant number.
It is the same story for BARC with a similar chart and indicators. I would wait for an upturn in the ADX to confirm my theories first. LLOY also looking OK as is AL. Given the nature of the beast at the moment, these represent risky plays which must include a tight stop against further drops. I will watch this week but these will not form part of my watchlist, and I would only trade on significant S/R points.
Anyway, on to the watchlist.
Afren (AFR)
Has been in a long term up trend for quite a long time, and I have been waiting for retracement for quite a while. It bull flagged out of resistance and has since found support at that breaching point. The last 3 days have seen steady gains as it breaks from another bull flag coinciding with a bounce off the support and good looking indicators.
The chart looks good, and am impressed with
Carphone Warehouse (CPW)
A simple short term double bottom play from CPW this week. The indicators look good, but the scope for profit isn't too great. I would enter on a confirmation of a fastline EMA break at 241.5 or more divergence on the MACD.
I would take profits at about 265 but I think you would have to hold for 2 weeks to reach this number - but still represents about 8.75%. Check the chart for reasoning across the indicators.
Man Group (EMG)
Excellent company name and a pretty decent looking chart. Bit more technical analysis about this one than CPW and it looks good for a few weeks here at EMG. What I'm seeing in an ascending wedge where it's resistance was broken last week. However, Friday saw a spinning top, indicating to me that the bulls and bears were indecisive about the movement for next week.
What normally happens with this setup is a break above resistance, followed by a drop to the new support - then a move from there upwards in a bull flag type formation.
What we also have here is an inverse head and shoulders pattern, which is very bullish. The indicators all look very strong, with perhaps MACD the weakest.
My entry point this week for EMG would be either a bounce off new support at about 595-599, or a break to new highs at 641. This setup is interesting because we are also seeing a longer term double top, a move south of the support at around 595 is a very strong indicator to short the stock, where as a move above that with confirmation is a very strong indicator to go long. Based on the indicators, I am bullish, but the chart will give me the right signals either way.
First Group (FGP)
The chart is similar to TLPR from last week, as the channel is there and lines up with the indicators well. However I think this trade isn't a 2-3 day swing, more like a 7-12 day hold. There is a strong support triple bottom which is gradually rising by a a tiny amount - which is bounced off midweek on a double bottomed wick.
I would wait for a fast line EMA break (green) at 530 for an entry signal with profit target at 592.5. I would put in a stop at 507.5 and I would short FGP on a bear break at lows of <493 style="font-weight: bold;" class="blsp-spelling-error" id="SPELLING_ERROR_32">Kazakhmys (KAZ)
A few things to look out here with KAZ. Firstly a double bottom channel break formed a short term upward trend to resistance at around 1595p which was broken and is around where we are now after a short term double drop.
This trade could go either way, but based on the indicators it should turn bullish, although the indicators are not fully developed so we should get a signal late Monday or early Tuesday. I would enter on gains on Fridays closing price which formed a hammer candlestick after a downward trend which is good. My price target is 1920p.
I would short KAZ on bear breaks at 1540p to around 1400p. The inverse head and shoulders have a price target of where we closed on Friday, so tread carefully and trade the triggers.
VT Group (VTG)
Continued from last week as the stock is still looking very good. The chart is included on last weeks blog so won't include. I will enter on any gains on Monday, with a profit target at about 690 - but this is looking good to break resistance at about 705p.
Blogger is being annoying and it keeps timing out, add the following to the watchlist with indicators and entries on the chart. Both of these are revisited from a few months ago when I was
Morgan Crucible (MGCR)
Check the chart for your entries, this is pretty much an ascending wedge play with the added factor of a drop to horizontal support line.
SIG (SHI)
Enter on break of 50 day ema, with a stop (and shorting position) of south of 688. Profit target is 830.
I will also passively watch BATS and TLPR based on last weeks analysis. I may also trade MTA on a pennant breakout at highs above 7.5 if they come.
Sunday update:
I've just been checking some charts from the American markets, and as I would like to trade US stocks in the future, I have added one this week as a tester. I feel that TA works best on US markets as that's what they were designed around. The liquidity in the top stocks is incredible and there seems to be a lot less manipulation.
Ciena Corp (CIEN)
Wedge and horizontal resistance breakout or channel play. Entry at 30.80 with short term target around 33 with potential for breakout to >36. Stop loss at 29.15.
All indicators look good so we'll see what happens here. Projected profits aren't high here, but it looks like a low risk move and is good enough to start my analysis of American markets.
From a monetary viewpoint, it's pretty unpractical for me to trade US stocks at the moment, given my broker is crap and would charge crazy fees. My data isn't live for US equities and there is also the US:UK conversion rates to factor into the costs. I am 100% confident that III would con me out of money at some point during currency conversion.
For some reason, when I look at US stocks I look at the price difference multiplied by volume for my profits instead of working on percentages. I think it's because I always see traders buying lumps of 100 instead of working off a cash position.
First up I would just like to focus on the airlines BAY and EZJ. These are both at trend resistance points combined with good indicators. Keep an eye on the oil price and a break of these trend lines for entry points.
Are the airlines ready to breakout?
I would also like to add that I think we may be beginning to see the bottom of the plummeting prices in the banking sector, in particular with RBS and BARC which look the best of the bunch.
In RBS we are seeing constant drops after the rights issue, but these drops lost momentum by Friday and formed a very short term double bottom. There is heavy negative divergence in the MACD indicating a turn around, which the stochastics are oversold but not yet ready. Watch 222-225 for support in RBS with 235 another significant number.
It is the same story for BARC with a similar chart and indicators. I would wait for an upturn in the ADX to confirm my theories first. LLOY also looking OK as is AL. Given the nature of the beast at the moment, these represent risky plays which must include a tight stop against further drops. I will watch this week but these will not form part of my watchlist, and I would only trade on significant S/R points.
Anyway, on to the watchlist.
Afren (AFR)
Has been in a long term up trend for quite a long time, and I have been waiting for retracement for quite a while. It bull flagged out of resistance and has since found support at that breaching point. The last 3 days have seen steady gains as it breaks from another bull flag coinciding with a bounce off the support and good looking indicators.
The chart looks good, and am impressed with
- The MACD has found the same level 3 times now, at which point the stock has rallied
- ADX taking control on the bull side
- Good volume supporting the moves at the end of the week
- Stochastics gearing for a run
Carphone Warehouse (CPW)
A simple short term double bottom play from CPW this week. The indicators look good, but the scope for profit isn't too great. I would enter on a confirmation of a fastline EMA break at 241.5 or more divergence on the MACD.
I would take profits at about 265 but I think you would have to hold for 2 weeks to reach this number - but still represents about 8.75%. Check the chart for reasoning across the indicators.Man Group (EMG)
Excellent company name and a pretty decent looking chart. Bit more technical analysis about this one than CPW and it looks good for a few weeks here at EMG. What I'm seeing in an ascending wedge where it's resistance was broken last week. However, Friday saw a spinning top, indicating to me that the bulls and bears were indecisive about the movement for next week.
What normally happens with this setup is a break above resistance, followed by a drop to the new support - then a move from there upwards in a bull flag type formation.
What we also have here is an inverse head and shoulders pattern, which is very bullish. The indicators all look very strong, with perhaps MACD the weakest.My entry point this week for EMG would be either a bounce off new support at about 595-599, or a break to new highs at 641. This setup is interesting because we are also seeing a longer term double top, a move south of the support at around 595 is a very strong indicator to short the stock, where as a move above that with confirmation is a very strong indicator to go long. Based on the indicators, I am bullish, but the chart will give me the right signals either way.
First Group (FGP)
The chart is similar to TLPR from last week, as the channel is there and lines up with the indicators well. However I think this trade isn't a 2-3 day swing, more like a 7-12 day hold. There is a strong support triple bottom which is gradually rising by a a tiny amount - which is bounced off midweek on a double bottomed wick.
I would wait for a fast line EMA break (green) at 530 for an entry signal with profit target at 592.5. I would put in a stop at 507.5 and I would short FGP on a bear break at lows of <493 style="font-weight: bold;" class="blsp-spelling-error" id="SPELLING_ERROR_32">Kazakhmys (KAZ)A few things to look out here with KAZ. Firstly a double bottom channel break formed a short term upward trend to resistance at around 1595p which was broken and is around where we are now after a short term double drop.
This trade could go either way, but based on the indicators it should turn bullish, although the indicators are not fully developed so we should get a signal late Monday or early Tuesday. I would enter on gains on Fridays closing price which formed a hammer candlestick after a downward trend which is good. My price target is 1920p.I would short KAZ on bear breaks at 1540p to around 1400p. The inverse head and shoulders have a price target of where we closed on Friday, so tread carefully and trade the triggers.
VT Group (VTG)
Continued from last week as the stock is still looking very good. The chart is included on last weeks blog so won't include. I will enter on any gains on Monday, with a profit target at about 690 - but this is looking good to break resistance at about 705p.
Blogger is being annoying and it keeps timing out, add the following to the watchlist with indicators and entries on the chart. Both of these are revisited from a few months ago when I was
Morgan Crucible (MGCR)
Check the chart for your entries, this is pretty much an ascending wedge play with the added factor of a drop to horizontal support line.SIG (SHI)
Enter on break of 50 day ema, with a stop (and shorting position) of south of 688. Profit target is 830.I will also passively watch BATS and TLPR based on last weeks analysis. I may also trade MTA on a pennant breakout at highs above 7.5 if they come.
Sunday update:
I've just been checking some charts from the American markets, and as I would like to trade US stocks in the future, I have added one this week as a tester. I feel that TA works best on US markets as that's what they were designed around. The liquidity in the top stocks is incredible and there seems to be a lot less manipulation.
Ciena Corp (CIEN)
Wedge and horizontal resistance breakout or channel play. Entry at 30.80 with short term target around 33 with potential for breakout to >36. Stop loss at 29.15.
All indicators look good so we'll see what happens here. Projected profits aren't high here, but it looks like a low risk move and is good enough to start my analysis of American markets.From a monetary viewpoint, it's pretty unpractical for me to trade US stocks at the moment, given my broker is crap and would charge crazy fees. My data isn't live for US equities and there is also the US:UK conversion rates to factor into the costs. I am 100% confident that III would con me out of money at some point during currency conversion.
For some reason, when I look at US stocks I look at the price difference multiplied by volume for my profits instead of working on percentages. I think it's because I always see traders buying lumps of 100 instead of working off a cash position.
so special