Several cryptocurrency pairs came under pressure. Below charts are covering those that have well-defined consolidation ranges and candidates for rebounds from lower boundaries as well as those that can breakout to new highs.

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REVIEW

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The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) is in an uptrend. Failure to hold above 105.5 levels resulted in a failed breakout and the ETF pulled back towards the long-term average at 100.5 levels. So far price action has been a reversion to the mean. Strong support area remains between 99 and 100.5. On the weekly scale price chart the upper boundary of the trend channel is likely to form support around the same level with the 200-day average. Breakdown below the long-term average can change the outlook to negative on ACWI ETF.

 

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Note: We have received many requests for the possibility to have the report in PDF format. Going forward I will attach a PDF version of the report for our members who would like to read on paper and also offline. Due to large size (given that I like to keep charts in large format) this is the best layout I could put the report. I hope this will be useful.

 

GLOBAL EQUITY MARKETS – DECEMBER 18, 2021 – PART I

GLOBAL EQUITY MARKETS – DECEMBER 18, 2021 – PART II

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TECH CHARTS WATCHLIST – SUMMARY OF RICS & PATTERNS IN FOCUS

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The benchmark for the Emerging Markets performance, the iShares MSCI Emerging Markets Index ETF (EEM) is trading below the 200-day average. The ETF has been recording lower lows and lower highs confirming the downtrend in Emerging Markets. Strong resistance area remains between 51.7 and 52.4. The longer price remains below the 200-day average, the higher the chances of an established downtrend. There is no bottom reversal chart pattern on daily scale.

The benchmark for the Frontier equity markets performance, the iShares MSCI Frontier 100 ETF, experienced its first setback at the strong resistance at 36.2 levels. This week’s price action resumed the reversion to the mean. The 200-day (40 week) average is forming support at 33 levels. Support area remains between 33 and 33.5 levels. I’m weighing the possibility of a H&S top with the right shoulder in progress. I will be looking for symmetry between shoulders.

Both Nasdaq 100 and S&P 500 are in a steady uptrend. There are no reversal chart patterns on daily scale price charts. Both indices rebounded from the minor support/resistance levels without correcting further towards their 200-day averages. The support was at 15,700 levels for the Nasdaq 100 index and 4,545 levels for the S&P 500 Index. Both charts are showing a steady uptrend. The uptrend line for Nasdaq 100 index is forming support around the same level with the minor low. 15,600-15,700 is short-term support. Breakdown below this area can target the 200-day average at 14,700 levels. S&P 500 Index might be forming a H&S continuation chart pattern (bullish) with the neckline standing at 4,716 levels. S&P is in a trading range between 4,545 and 4,716 levels.

The benchmark for small cap equities, experienced a failed breakout. Price tested the 200-day average at 2,200 levels. 2,360 becomes the resistance. It has been a challenging year for small caps and it continues to be difficult for breakout setups. Last horizontal support stands at 2,100 levels. Unless the index quickly recovers above the 200-day average, it will risk breaking down 2,100 levels. A rebound from current levels can increase the probability of a double bottom reversal.

Euro Stoxx 50 Index tested the lower boundary of its expanding channel and the 200-day average at 4,040 levels. There has been several tests of the lower boundary and I see it as a valid technical support. Over the past few trading sessions we have seen a rebound from the support area. Breakdown of the last strong support at 4,060 levels can change the trend from up to down and result in further correction towards the next support at 3,850 levels. Currently we can focus on a trading range between 4,060 and 4,240 levels.

Euro Stoxx banking index failed to hold above the  horizontal support and the lower boundary of the trend channel which resulted in a correction towards the 200-day average at 94 levels. If we see a breakdown below the 200-day average price can continue its correction towards 85 levels. We can identify a gap opening. If this is a breakaway gap, it will not get filled. Breakdown below the 200-day average can resume the downtrend.

Germany’s Midcap equity benchmark reversed from its previous high at 36.4K. As price tests the lower boundary at 33.2K, I will be looking at two options; possibility to rebound and form a rectangle consolidation or possibility to breakdown and complete a double top with price objective of 30.4K. It is important to note that the 200-day average and the lower boundary are overlapping around the same level. I call these type of support areas as inflection points.

Japan’s NIKKEI 225 Index is possibly forming a multi-month long rectangle and can trade between 27K and 30.7K. Breakdown below the 200-day average resulted in a test of the lower boundary at 27K levels. The index is offering trading opportunity between well-defined boundaries.

China SSE 50 Index experienced its first strong weekly rebound that pushed the index towards the long-term average. This week’s price action hasn’t seen a follow through. Breakout above the 200-day average can put the index back to positive territory. Next couple of weeks I will monitor China equities closely for possible recovery and stability above the 200-day average.

Turkey’s BIST 100 equity benchmark cleared the resistance at 1,600 levels on weekly scale. Breakout above a rising trend channel is usually followed by a runaway price action (strong rally). The monthly close was above the upper boundary of the trend channel. The upper boundary of the monthly scale price chart is at 1,740 levels that is expected to be support during pullbacks. The daily scale price chart shows a blow off top with the long upper shadow. I expect the index to consolidate and possibly pullback to the upper boundary of the rising trend channel.

Weakness in local currency continues to put pressure on TUR ETF listed on the Nasdaq Stock Exchange. The ETF is a good representation of stock market performance for foreign investors. While the indices are rallying on local currency based benchmarks, the opportunity cost by being invested in Turkish Lira assets can be seen from the chart below. The chart shows a decade-long downtrend, which I call it as the lost decade. Since the beginning of 2019, the ETF formed a possible rectangle chart pattern with the lower boundary acting as support at 17.6 and the upper boundary as resistance at 29 levels. Breakdown below the lower boundary can result in a correction to all-time lows with a price target of 11 levels. This week’s price action was mainly driven by Friday’s sell-off and continued strength on USD vs the local currency. I will give this chart another week to conclude on the breakdown from the multi-year long rectangle.

Price chart of cash Gold price has been forming lower highs since the last quarter of 2020. Price is trading around the 200-day average at 1,800 levels. Breakout above 1,840 levels failed. Monthly scale price chart is still not showing a clean breakout. The chart pattern can become a descending triangle with the horizontal support at 1,680 levels. Another test of 1,680 levels can put the long-term uptrend in jeopardy.

Silver remains range bound between 21.8 and 30 levels. Breakout above the 200-day average and the neckline at 24.7 levels failed. Chart pattern is morphing. 21.8 is long-term support and until there is a breakdown, price offers trading opportunity between boundaries. The trading range is between 21.8 and 24.7 levels.

The daily scale price chart of Silver shows much better the price action between the boundaries. It is important to note that as Silver is testing the lower boundary at 21.8 levels, price remains below the long-term average. Breakdown below 21.8 levels can confirm the downtrend and also compete the rectangle on the downside. I’m open for both possibilities around these levels. A rebound and keeping the trading range intact or a breakdown and a correction towards next support level at 19 levels.

Copper once again found support and rebounded from 4.20 levels, the 200-day moving average. At this point I can conclude that price is in a trading range between 4.20 and 4.88 levels. There is no clear chart pattern on daily and weekly scale price charts. Breakdown below the 200-day average can result in a larger scale correction towards the next support at 3.9.

European Bund price is in a wide consolidation range between 169.3 and 179.7 levels. The trading range is possibly forming a 20 month-long rectangle. Strong support remains at 169.3 levels. Recovery back above 169.3 is possibly acting as a bottom reversal.

The U.S. 10 Year T-Note re-tested the lows around 130.7 levels. Support area is between 130 and 130.7. The 200-day moving average is forming resistance at 132.8 levels. If price manages to remain above short-term support area (130-130.7), I will expect a trading range between 130 and 132.8 levels. Though, it is important to note that price is below the long-term average, which confirms the downtrend on U.S. Treasuries. A recovery above the 200-day average can put the outlook back to positive for U.S. Treasuries.

Both Nifty 50 and Sensex has been in a strong and steady uptrend. Price has taken a parabolic shape and parabolic price action was not sustainable. The index pulled back to fill the gap openings. Daily scale price chart completed short-term H&S top reversals. The patterns on daily scale price charts completed as expected (H&S tops) and price entered into reversion to the mean stage and pullback towards the 200-day averages. Short-term H&S top price targets for Sensex at 56K and for Nifty 50 at 16.8K were met. Both indices failed to show follow through after forming minor bottom reversals. The charts are possibly continuing the reversion back to the mean. The 200-day average for NIFTY stands at 16.3K and for SENSEX at 54.6K.

The Dollar Index is gaining strength after forming a double bottom on the monthly scale price chart. Breakout above 93.43 is now being followed by a steady uptrend towards the price target at 97.23 levels. Previous resistance at 93.43 levels becomes the new support. Long-term price chart shows a wide range between 88.7 and 103 levels.

I’ve discussed USDJPY in the previous updates. I think the chart has completed the long-awaited breakout. Strong USD against Japanese Yen can target 125 levels in a short period of time. The pair is going through historical low volatility condition and  the possible breakout can be followed by strong price action (back to back monthly long white candles). October’s candle was a long white candle with a close at the highs of the month. November was muted. For the breakout to succeed, price needs to accelerate on the upside.

The chart below is the 10 Year U.S. Treasury Yield Index. Price fell below the 200-day average for a day and quickly recovered. Yields can remain between 14.08 and 16.9 levels, a possible trading range. Failure to hold above the 200-day average will once again raise the possibility of a reversal and test of 11 levels, the minor low.

An interesting chart pattern development is taking place on Australia S&P ASX 200 Index. We might be at the early stages of this chart pattern and also the failure of it can suggest continuation of the uptrend. So I added 2 important levels to keep an eye on. If this chart pattern is a H&S top, the neckline is acting as support at 7,205. Breakdown can also breach the 200-day average suggesting a downtrend towards 6,840 levels. Chart pattern negation level is the high of the right shoulder at 7,465 levels. A breach above that level will signal the continuation of the uptrend with a price target of 7,850 levels.

Charts below review several ETFs that have similar technical outlook. If you like to trade range-bound price actions between well-defined boundaries, those setups are valuable for you. If you like to trade breakouts/breakdowns, any weakness in the following week can become a short signal. Rectangles can act as top reversals and reverse uptrends. Until that happens those well-defined ranges are offering trading opportunity between horizontal boundaries.

ISHARE MICRO CAP ETF (IWC) formed a 10 month-long rectangle. This week’s price action rebounded from the lower boundary of the rectangle at 136 levels but failed to recover above the 200-day average. Breakdown can confirm the rectangle as a top reversal with possible price target of 118 levels.

ISHARE EUROPE ETF (IEV) formed 6 month-long rectangle with the lower boundary acting as support at 51.5 and the upper boundary as resistance at 55.7 levels. Breakdown below the lower boundary can confirm the rectangle as a top reversal with the possible price target of 48 levels. The ETF is offering trading opportunity between boundaries.

ISHARE MSCI EAFE ETF (EFA) formed a 6 month-long rectangle with the upper boundary acting as resistance at 82 and the lower boundary as support at 76.4 levels. Price recovered above the 200-day average. Breakdown below the horizontal support can result in a top reversal with the price target at 71 levels. Until we see a breakdown or breakout, the ETF will offer trading opportunity between boundaries. Breakdown from a well-defined consolidation that takes place below the 200-day average will be a high conviction trade.

ISHARES 0-5 YR TIPS BOND ETF (STIP.K) formed a 6 month-long rectangle with the lower boundary acting as support at 105.4 and the upper boundary as resistance at 107.1 levels. Price failed to hold above the lower boundary. I will confirm this breakdown after another day of weakness in the following week.

Invesco Dynamic Oil & Gas Services ETF formed an 8 month-long rectangle with the lower boundary acting as support at 2.98 and the upper boundary as resistance at 4.27 levels. Breakdown below 2.98 can result in a downtrend towards 2.1 levels. The ETF rebounded from the well-defined horizontal support. Though, price still remains below the 200-day average.

There are 6 new breakout/breakdown signals.

TECH CHARTS ALERT

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TECH CHARTS WATCHLIST

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AMERICAS

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TRAVELERS COMPANIES INC (TRV)

The Travelers Companies, Inc. is a holding company principally engaged, through its subsidiaries, in providing a range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. The stock is listed on the New York Stock Exchange. Price chart formed a 5 month-long rectangle with the horizontal boundary acting as strong resistance at 162.00 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 164.40 levels will confirm the breakout from the 5 month-long rectangle with the possible chart pattern price target of 177.60 levels. A daily close below 143.8 will confirm the breakdown with the possible price target of 133 levels. (Learn more: Video Tutorial)

EUROPE

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METROPOLE TELEVISION SA (MMTP.PA) – new addition to watchlist

Metropole Television SA is a France-based audiovisual company that specializes in the production, distribution and marketing of television (TV) programs. The stock is listed on the Paris Stock Exchange. Price chart formed a 9 month-long rectangle with the horizontal boundary acting as strong support at 16.50 levels. Both boundaries were tested several times over the course of the chart pattern. A daily close below 16.00 levels will confirm the breakdown from the 9 month-long rectangle with the possible chart pattern price target of 14.20 levels. (Learn more: Video Tutorial)

CHRISTIAN DIOR SE (DIOR.PA) – new addition to watchlist

Christian Dior SE is a France-based holding company engaged in the production and distribution of consumer goods. The Company has six principal product lines: Christian Dior Couture, marketed under the Christian Dior brand; Wines and Spirits, including the Moet & Chandon, Veuve Clicquot, Hennessy and Dom Perignon brands, among others; Fashion and Leather Goods, comprising the Louis Vuitton, Fendi, Marc Jacobs and Kenzo brands, among others; Perfumes and Cosmetics, including the Guerlain, Givenchy and Christian Dior brands, among others; Watches and Jewelry, comprising the TAG Heuer, Chaumet and Zenith brands and others, and Selective Retailing, such as the Sephora, DFS and Le Bon Marche brands, among others. The stock is listed on the Paris Stock Exchange. Price chart formed a 7 month-long head and shoulder continuation with the horizontal boundary acting as strong resistance at 723.00 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 744.00 levels will confirm the breakout from the 7 month-long head and shoulder continuation with the possible chart pattern price target of 834.00 levels. (Learn more: Video Tutorial)

OK RUSAL MKPAO (RUAL.MM)

OK Rusal MKPAO is a Russia-based aluminum producer. The Company produces aluminum with electricity that comes from renewable sources, and those technologies allow reducing greenhouse gas emissions at all production stages. The Company operates in Europe, South and North Americas, Africa, and Australia. The stock is listed on the Russia Micex Stock Exchange. Price chart formed a 4 month-long head and shoulder top with the horizontal boundary acting as strong support at 67.60 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close below 65.60 levels will confirm the breakdown from the 4 month-long head and shoulder top with the possible chart pattern price target of 56.00 levels. Given that the H&S top is forming above the 200-day average, I’m weighing the possibility of a H&S top failure. The high of the right shoulder at 76 will act as the chart pattern negation level with price objective of 93 levels. (Learn more: Video Tutorial) (Learn more: Video Tutorial H&S top failure)

INVESTOR AB (INVEb.ST)

Investor AB is a Sweden-based industrial holding company. Its operations are divided into three business segments: Listed Core Investments, EQT and Patricia Industries. The Listed Core Investments segment consists of listed holdings, which embrace ABB, AstraZeneca, Atlas Copco, Electrolux, Ericsson, Husqvarna, Nasdaq, Saab, SEB, Sobi and Wartsila. The EQT segment consists of the holdings in EQT private equity company. The Patricia Industries includes the wholly-owned subsidiaries, 3 Scandinavia and the former IGC portfolio, as well as all other financial investments, except EQT and the Company’s trading portfolio. The wholly-owned subsidiaries include Aleris, BraunAbility, Laborie, Molnlycke, Permobil, The Grand Group and Vectura. The stock is listed on the Stockholm Stock Exchange. Price chart formed a 4 month-long cup & handle continuation with the horizontal boundary acting as strong resistance at 222.00 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 228.00 levels will confirm the breakout from the 4 month-long cup & handle continuation with the possible chart pattern price target of 255.00 levels. (Learn more: Video Tutorial)

CREDIT SUISSE GROUP AG (CSGN.S)

Credit Suisse Group AG (Credit Suisse) is a financial services company. The stock is listed on the Swiss Stock Exchange. Price chart formed a 7 month-long rectangle with the horizontal boundary acting as strong support at 8.75 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close below 8.50 levels will confirm the breakdown from the 7 month-long rectangle with the possible chart pattern price target of 7.60 levels. Until there is a breakout in one direction, stock offers trading opportunity between boundaries. (Learn more: Video Tutorial)

MERCANTILE INVESTMENT TRUST PLC (MRCM.L)

The Mercantile Investment Trust plc is a United Kingdom-based investment trust company. The Company’s objective is to achieve long term capital growth from a portfolio of the United Kingdom-based medium and smaller companies. The stock is listed on the London Stock Exchange. Price chart formed an 8 month-long head and shoulder top with the horizontal boundary acting as strong support at 257.00 levels. The neckline was tested several times over the course of the chart pattern. A daily close below 250.00 levels will confirm the breakdown from the 8 month-long head and shoulder top with the possible chart pattern price target of 227.00 levels. (Learn more: Video Tutorial)

REXEL SA (RXL.PA)

Rexel SA is a France-based company that is engaged in the distribution of electrical parts and supplies to professionals. The Group offers electrical products and solutions to professionals for buildings and for residential, industrial, and tertiary infrastructures, through its points of sale. The stock is listed on the Paris Stock Exchange. Price chart formed a 5 month-long rectangle with the horizontal boundary acting as strong resistance at 18.40 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 18.67 levels will confirm the breakout from the 5 month-long rectangle with the possible chart pattern price target of 20.50 levels. A daily close below 16.05 levels will confirm the breakdown with the possible price target of 14.5. In that case rectangle will be confirmed as a top reversal. (Learn more: Video Tutorial) (Learn more: Trading range-bound price action)

IPSEN SA (IPN.PA)

Ipsen SA is a France-based biopharmaceutical group specialized in specialty care. The Company operates globally through two segments: Specialty Care and Consumer Healthcare. The stock is listed on the Paris Stock Exchange. Price chart formed a 14 month-long cup & handle continuation with the horizontal boundary acting as strong resistance at 92.90 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 95.70 levels will confirm the breakout from the 14 month-long cup & handle continuation with the possible chart pattern price target of 117.30 levels. (Learn more: Video Tutorial)

BENETEAU SA (CHBE.PA)

Beneteau SA is a France-based holding company of the group engaged in the construction and sale of recreational boats and mobile leisure homes. The stock is listed on the Paris Stock Exchange. Price chart formed a 6 month-long rectangle with the horizontal boundary acting as strong resistance at 14.90 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 15.35 levels will confirm the breakout from the 6 month-long rectangle with the possible chart pattern price target of 17.40 levels. The stock is offering trading opportunity between well-defined boundaries. (Learn more: Video Tutorial) (Learn more: Trading range-bound price action)

BANK OF IRELAND GROUP PLC (BIRG.I)

Bank of Ireland Group plc is an Ireland-based financial services company. The Company provides a broad range of banking and other financial services. The stock is listed on the Ireland Stock Exchange. Price chart formed a 4 month-long cup & handle continuation with the horizontal boundary acting as strong resistance at 5.40 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 5.56 levels will confirm the breakout from the 4 month-long cup & handle continuation with the possible chart pattern price target of 6.67 levels. The handle part of the chart pattern can be identified as a rectangle. (Learn more: Video Tutorial)

NEXT PLC (NXT.L)

NEXT plc is a United Kingdom-based retailer offering clothing, footwear, accessories, beauty and home products. The stock is listed on the London Stock Exchange. Price chart formed an 8 month-long rectangle with the horizontal boundary acting as strong resistance at 8,200.00 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 8,445.00 levels will confirm the breakout from the 8 month-long rectangle with the possible chart pattern price target of 9,195.00 levels. (Learn more: Video Tutorial)

KEMIRA OYJ (KEMIRA.HE)

Kemira Oyj is a Finland-based Company, which offers sustainable chemical solutions for water intensive industries. The stock is listed on the Helsinki Stock Exchange. Price chart formed an 8 month-long rectangle with the horizontal boundary acting as strong resistance at 14.60 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 14.80 levels will confirm the breakout from the 8 month-long rectangle with the possible chart pattern price target of 16.00 levels. The stock offers trading opportunity between boundaries. Incase of a daily close below 12.90 levels rectangle can act as a top reversal and target 11.8 levels. (Learn more: Video Tutorial)

MIDDLE EAST & AFRICA

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ATTACQ LTD (ATTJ.J)

Attacq Limited is a capital growth property company. The Company operates through eight segments: Office and mixed-use properties, Retail properties, Light industrial properties, Hotels, Vacant land and infrastructure, Developments under construction, International investments and Head office/other. The stock is listed on the Johannesburg Stock Exchange. Price chart formed a 5 month-long rectangle with the horizontal boundary acting as strong resistance at 752.00 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 775.00 levels will confirm the breakout from the 5 month-long rectangle with the possible chart pattern price target of 882.00 levels. (Learn more: Video Tutorial)

ASIA

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Australia and New Zealand Banking Group Limited provides a range of banking and financial products and services. The Company’s segments include Australia, New Zealand, Institutional, Pacific, and Technology, Services and Operations and Group Centre (TSO). The stock is listed on the Australia Stock Exchange. Price chart formed a 7 month-long rectangle with the horizontal boundary acting as strong resistance at 29.60 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 30.00 levels will confirm the breakout from the 7 month-long rectangle with the possible chart pattern price target of 32.20 levels. A daily close below 26.4 levels will confirm the breakdown with the possible price target of 24.3 levels. (Learn more: Video Tutorial)

OOH!MEDIA LTD (OML.AX)

oOh!media Limited is an Australia-based out-of-home (OOH) media company. The Company offers advertisers the platform to create engagement between people and brands through its portfolios in Australia and New Zealand. The stock is listed on the Australia Stock Exchange. Price chart formed a 9 month-long rectangle with the horizontal boundary acting as strong resistance at 1.91 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 1.97 levels will confirm the breakout from the 9 month-long rectangle with the possible chart pattern price target of 2.40 levels. (Learn more: Video Tutorial)

Announcement:

Dear Tech Charts Members,

We are continuing our Member webinar series with chart pattern reliability and how the latest market conditions have impacted success rates on different chart patterns. 

Scheduled for: Thursday, December 16, 8:30 am mountain (register below)

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