Planet Wealth - Australian Stock Market Education » Stock Charts

MAP Turning Bullish – Moving Averages Confirm Bull Signal

Planet Wealth — Thu, 09 Jul 2009 01:29:55 +0000

MAP has been channelling down since October 2007. May 2009 saw the stock break up and out of the channel which was the first sign that a change of trend could be happening.

The second indication of a possible trend change was the Higher Major Peak. A higher major trough would confirm the bulls have taken control.

The third indication that the trend could be changing has happened in the last two week with the two well respected Moving Averages (MAV”s) crossing over to a bullish move.

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XOA Still Showing Bullish Signals

Planet Wealth — Fri, 03 Jul 2009 14:19:33 +0000

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.

XAO Uptrend Channel Continuation

Planet Wealth — Sun, 21 Jun 2009 12:24:58 +0000

This week saw the XAO pull back strongly off the top off the current uptrend channel. Will next week continue the pull back or is there enough support to have it bounce back.

The pull back this week is a continuation of the uptrend channel. This was stronger than the previous support level at 3900. As it broke through the support line it is likely continue the pull back to the bottom of the channel before continuing up.

A less likely but possible move would see the XAO bounce this week as it has paused on a 61.8% Fibonacci retracement level which could provide support.

Overall, the pull back that has happened is still part of the bullish run over the last 3 months. However should the XAO break down and out of the current channel, we will likely see 3700.

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XAO Now in an Up Trend Channel

Planet Wealth — Fri, 19 Jun 2009 00:17:52 +0000

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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NAB in Consolidation Pattern

Planet Wealth — Tue, 26 May 2009 14:19:03 +0000

March and early April saw all the banks rally hard with the rest of the market. After this rally there are signs of weakening in many. NAB is one of those stocks.

Nab found resistance at $23.50 after the rally. This resistance level has been valid as far back as 1999 and is also the intersection of well respected Moving Average (MAV). From there the stock consolidated between $23.50 and $21.00. $21.00 has been a strong support made by a weekly support line, a 6 month up trend line and the 38% Fibonacci retracement level. The consolidation is showing signs of failing with a Lower Peak (LP) being formed.

The Support and resistance that has been keeping NAB in consolidation, are strong a there is multiple resistance and support lines at each level. Probabilities suggested a pull back is more likely. If this is to happen the next support is $19.00 and also the 62% Fibonacci retracement. Should NAB break up$26.00 is the next major resistance level.

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STO Pennant Formation

Planet Wealth — Wed, 06 May 2009 15:32:02 +0000

At the beginning of the year I did an analysis of STO. It showed strong resistance and high probability of running down at the 50% or 61.8% Fibonacci level. Where is it at now?

STO did manage to continue up past the 61.8% Fibonacci level, but not very far before encountering the current resistance. It is finding resistance at the down trend line that started in June last year. This is also an intersection of a resistance line around $17.30. Pushing the stock higher has been a well respected up trend since October last year. This is creating a pennant.

Should STO break down from the pennant and close below $16.00 a retest of $14.80 support would be expected. A break higher with a close above $17.30 is likely to see a retest of resistance at $20.40.

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The Importance of Moving Average Indicators (MAV)

Planet Wealth — Mon, 20 Apr 2009 00:30:34 +0000

No matter what style of trading or investing you do, there should always be more than one reason to take a position on a stock to ensure you are stacking the odds in your favour thus securing a long term future in trading.

A very powerful tool to use is Moving Averages (MAV). Nearly all basic charting software will have MAV built into them. A MAV can help indicate the direction of the stock. For example, the right MAV on a chart would show all bull moves above the MAV and all bear runs trading below the MAV.

The first thing to consider when placing a MAV on a stock you would like to trade is the length of time you want to be in the trade. Are you looking to take advantage of short moves of a week or so, or, are you wanting to invest in a stock for the next few years to get the most out of it? Once this is determined, it will give you a starting point.

Say you are looking at short term moves, chose small number MAV’s such as 8, 10 15 or any other number around this area. Place different ones on your chart and see which fits best and captures most of the move from past data. Buy when the stock breaks above and sell when it closes below. For medium term of say a few months to a year use a larger number and for long term buy and hold choose a larger number again.

The cart below has 3 different averages on it displaying the short, medium and long term moves a MAV can capture.

Remember each stock has it’s own personality and will therefore use different MAV’s to other stocks. This coupled with other information about the stock or chart you are reading can be a very powerful tool in trading and is well worth spending a few hours back testing to find some valid averages.

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Moving Average acts as Support and Resistance

Planet Wealth — Tue, 14 Apr 2009 11:14:30 +0000

CGG (Citadel Resource Group Limited) is another resource stock that is indicating it would like to climb higher. Let’s take a look at the weekly chart.

The stock started back in 2001 and had some down moves until 2003 when it started to climb again. The long term trend is up dating back to 2003 and today CGG sits on this trend line and has been testing it since December last year with Higher Troughs.

The Moving Average that is on the chart acts as a very good wavy support and resistance. Should the stock break up and out of the current Triangle Pattern, and through the Moving Average, there would now be several elements that would indicate this stock could climb higher. Higher Peaks to add to the current Higher Troughs, trading above the moving average and a bounce off the long term up trend line validating it once more. This stock could one to watch for possible buy opportunities.

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Dow Jones Reaches Pinnacle Point of Resistance

Planet Wealth — Wed, 08 Apr 2009 07:47:17 +0000

With America’s economy seeming to have some level of influence in the world economy, I thought it would be good to see what the Dow Jones (DJI) chart looks like.

Last week the XAO closed on an area of a pinnacle point (see last post). Should it break up we are likely to see alot more upside, should it rebound off the resistance the bear market still has a strong hold. Will the DJI help us see some possible foresight of what the XAO may do?

On the weekly Chart, the DJI is showing us, it too is at a pinnacle point. After channelling down for 6 months, it has spent the last 4 weeks rallying to an intersection of a strong weekly resistance line and the top of the 6 month channel. If the rally still has enough power to break through, the next point of resistance is at 9000. If the rally is losing strength we could expect to see a rebound off resistance and the channel validated once more. Either way, it is likely to have an influence over what the XAO does at it’s own pinnacle point.

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Bearish Chart Pattern – Double Top

Planet Wealth — Mon, 06 Apr 2009 04:09:35 +0000

The end of this week saw the XAO break above the 12 month down trend channel. Does this mean we can expect the XAO to climb higher?

Not yet. Though it has broken free of this channel it is still being held down by a strong weekly support. If this resistance is respected once again, a Double Top (DT) formation has been made. This is a bearish pattern. This also keeps the major lower peaks and lower troughs going. The Seller are still in control.

Should this be broken through and the XAO starts to climb higher, a higher peak will now be formed and the resistance could possibly become support and giving the higher trough. This would then mean the buyers have taking control. But beware; there is still the overall down trend that needs to be broken to truly consider a bull market again.

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