INDIA BOMBAY SE SENSEX INDEX & USD/INR
/0 Comments/in DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel KibarIndia’s Sensex Index might be forming a major top reversal (Head & Shoulder Top) in the past two years. The length of the distribution period makes this pattern significant. 3 important technical levels showing strong resistance at 18,000 levels. These are; 200 day moving average, horizontal resistance (green line) and the downtrend channel. H&S pattern will be confirmed if the index breaks down the support at 15,700. RSI failing to move above 50 levels while the price found resistance at the 200 day moving average increased the possibility of a larger scale correction. Overall bearish outlook…
Weak Indian Rupee versus US Dollar does not bode well for the equities. INR is targeting 52 levels.
INTEL & MICROSOFT
/0 Comments/in DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel KibarSymmetrical triangle is one of the common technical chart pattern that we see on almost every time frame on a price chart. It is easy to spot on a price chart and usually followed as a continuation pattern (consolidation before the trend resumes). The two charts above analyze similar symmetrical triangle patterns on Intel and Microsoft. Intel has breached above the upper boundary of the consolidation while Microsoft is still below the upper boundary. After these type of breakouts we would like to see price holding above the previously broken support/resistance level. Resistance should become support. In this case Intel should not fall below 23.60 level. If Intel holds above 23.60 in the next few weeks we will expect the price to reach 28 levels and Microsoft to follow the same pattern and breakout from the consolidation range. in the short-term both charts have neutral/positive technical outlook.
MSCI ACWI & MSCI EM
/0 Comments/in DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel KibarSince my last update on the MSCI ACWI & MSCI EM, two indices have rebounded from major support levels. I have mentioned that we can’t rule out a rebound in the short-term even though the markets have clearly moved below their 200 day moving averages and reversed their 3 year-long uptrends. I’m still analyzing these two charts with the same template and I think world equity markets are now close to major resistance levels. Time will tell If these markets are forming major H&S top patterns which could be bearish in the long term. What we can say for now is if the cyclical bear market forces are going to be in control markets should reverse to the downside and test weaken towards their support levels (MSCI ACWI: 265, MSCI EM: 850)
MSCI ACWI & MSCI EM
/0 Comments/in DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel KibarMarkets have experienced sharp corrections in the past few months. After the weakness and major breakdowns there has clearly been technical damage on the price charts. Most important technical information is that almost all indices are now trading below their 200 day moving averages. Penetration below the 200 day moving average can be accepted as a short-term correction but if price stabilizes below the 200 day moving average this should raise a red flag and warn us of a possible change in medium-long term trend. Form the two MSCI indices above (MSCI All Countries World Index & MSCI Emerging Markets Index) we can say that price stabilized below the 200 day moving average in the past few months. 3 year-long uptrends are now damaged. However, we might be due for a rebound towards the 200 day moving averages. This could last for a few months. Positive divergence supports the case for a short-term rebound on the indices.
IAM GOLD
/0 Comments/in DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel KibarSimilar to Barrick Gold, IAM Gold is also testing its strong horizontal resistance at 23 level. Higher highs have formed an upward sloping trend support at 19 level. A breakout from this range should result in a strong trend. It is important to note that the 200 day moving average and the trend line support are overlapping at 19 which makes this support more significant.
Barrick Gold
/0 Comments/in DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel KibarGold’s strong uptrend has taken a parabolic shape. Price has climbed from $1,500 levels to $1,900 in the past few months. Gold is well above its 2008 high levels. What about gold stocks? Barrick Gold is one of the gold stock that is now testing its 2008 high level at 55. It has definitely lagged the Gold cash price performance but a breakout above 55 levels could push Barrick Gold higher with strong momentum. Horizontal resistance at 55 and upward sloping trend line forming support at 45 gives barrick gold a bullish outlook.
WTI CRUDE OIL
/0 Comments/in DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel KibarThe chart above shows the continuous contract for Light Crude Oil. 200 day moving average and last 6 month’s downward trend (green line) are both strong resistance at $93 level. Light Crude formed a bearish wedge that could give way to another leg of sell-off towards $70-$75 range. Rebound has been weak and choppy which a clear pullback to the previously broken 200 day moving average. Unless we see a sharp recovery above $93 level we should expect lower prices on crude oil.
ROUGH RICE
/0 Comments/in DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel KibarHead and Shoulder is a common technical analysis chart pattern that helps us identify major reversals. An inverted H&S would signal a base formation and should be regarded as a bullish development on the price chart. While H&S top is a bearish chart pattern that signals further weakness in price. Rough Rice which lagged most of the agricultural commodities’ performance during 2009-2010 period might be forming an inverted H&S pattern. 16 level was critical resistance and Rough Rice broke above this in the last one month. If July-August period is a pullback to the broken resistance at 16 level, Rough Rice should resume its uptrend in the following weeks. First short-term target is at 20.50 and the calculated possible H&S formation price target is at 27.50. Failure to hold above 16 level will change the positive technical outlook to neutral/negative.
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