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HONG KONG – SUNAC CHINA HOLDING

December 8, 2016/0 Comments/in EMERGING MARKET EQUITIES, Uncategorized/by Aksel Kibar

SUNAC CHINA HOLDING (1918.HK)

A new chart pattern breakout signal is triggered on Hong Kong listed SUNAC CHINA HOLDING. After its 6th test, SUNAC broke out of a year-long rectangle with a strong daily bar and increasing volume. If the stock manages to hold on to gains by the end of the week, it will also register a strong weekly close. Breakouts from horizontal trading ranges are usually reliable. Today’s strong close pushed the price well above the horizontal resistance at 6.05 levels and the breakout confirmation level at 6.23. A long trade is entered with stop-loss at 5.90. Rectangle chart pattern price target stands at 7.7 levels. Failure to hold above 6.05 levels in the following days/weeks will put the bullish interpretation in question.

SUNAC CHINA HOLDING – WEEKLY SCALE

SUNAC CHINA HOLDING – DAILY SCALE

GERMANY DAX INDEX

December 7, 2016/0 Comments/in DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel Kibar

GERMANY DAX INDEX – DAILY SCALE

Germany’s DAX Index breaks out of a 4 month-long rectangle chart pattern with a possible break-away gap. Tech Charts blog drew attention to the developing chart pattern in the last week of November (Germany Dax Index – 20/11/2016). Today’s price action cleared the strong 4 month-long horizontal resistance at 94.60 levels. For common stocks, Edwards and Magee in their book Technical Analysis of Stock Trends suggest that for a breakout confirmation a daily close by a 2.5%-3% margin above resistance level is required. While, this margin can be perfectly fine for stocks, for indices, commodities and currencies it could result in a delayed entry. More appropriate threshold could be a daily close by a margin of 0.5%-1% above the resistance area for indexes, commodities and currencies.

Breakout on Germany’s DAX index cleared that threshold (grey dashed line at 10,910) with a strong daily close and confirmed the breakout from the 4 month-long rectangle chart pattern. Rectangle is a continuation chart pattern. Breakout not only took place with a strong daily close but also with a possible break-away gap. Richard Schabacker in his pioneering research (Technical Analysis and Stock Market Profits) on classical charting, explains break-away gaps as follows:

Break-away gap appears at the beginning of a movement and generally comes at the completion of some definite area formation. It is seldom covered for some time in the future and, when it proceeds from a strong major bottom formation, it may never be covered, or at least not until the return of prices in the next great cycle some years later. The Break-away gap is comparatively uncommon and indicates a definite change in the technical picture…The logical conclusion is, therefore, for a continuation of that strong movement in the direction toward which the gap was made.

As a matter of fact, it is always difficult and frequently impossible to be certain whether a gap is of the Common or Break-away variety at the instant that the gap appears. This is the principal reason why we cannot place too much credence in the various gap theories and why we must consider gaps as of only secondary importance in forecasting. The fact remains that most gaps which lead decisively out of an established pattern are not closed; they become and remain true Break-away gaps. And the wider the Break-away gap at the breakout, the less likely it is to be closed.

In brief, the Break-away gap emphasizes the breakout of prices and indicates a sudden change in the technical picture, but the mere fact that prices have broken decisively out of a technical formation is of greater importance than the gap. When the evidence of the gap is added to all the other evidences of a decisive breakout, we are encouraged to act promptly and decisively.

For stock traders, I attached below the ISHARES DAX UCITS ETF that is listed in Germany. Price chart of the ETF is very similar to the index as it tracks the performance of the XETRA DAX index. The upper boundary of the rectangle was standing at 94.60. With the decisive breakout I initiated a long position with a stop-loss slightly below the boundary at 93.30 levels. Rectangle chart pattern price target is at 100 levels for the ISHARES DAX ETF. Tech Charts twitter followers can find chart pattern breakout signals under #TECHCHARTSALERT

ISHARES DAX UCITS ETF – DAILY SCALE

PORSCHE AUTO HOLDING (PSHG_p.DE)

Strength in European equities can gain momentum. A chart that is currently on my watch list is PORSCHE AUTO HLDG listed in Germany. Stock is possibly forming a year-long symmetrical triangle that could act as a bottom reversal if the price can clear strong resistance area between 49.65 and 50. A decisive close above 50.85 levels will confirm the breakout from the long-term sideways consolidation. Tech Charts twitter followers can find developing chart patterns under #TECHCHARTSWATCHLIST

PORSCHE AUT HLDG – WEEKLY SCALE

METASTOCK

December 3, 2016/0 Comments/in ANNOUNCEMENTS, Uncategorized/by Aksel Kibar

Dear Tech Charts followers,

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Regards,

Aksel Kibar

HONG KONG and CHINA

November 25, 2016/0 Comments/in DEVELOPED MARKET EQUITIES, EMERGING MARKET EQUITIES, Uncategorized/by Aksel Kibar

China and Hong Kong listed equities had a strong performance over the past week. Hang Seng index rebounded from its 200 day average and the lower boundary of its possible 8 month-long upward trend channel. China SSE Composite index resumed higher trading above its 200 day average after clearing the horizontal resistance at 3,100 levels. Both Hang Seng index and China SSE Composite index can help emerging markets to gain strength in the coming weeks.

SSE COMPOSITE INDEX weekly scale price chart

HANG SENG INDEX weekly scale price chart

A new chart pattern breakout signal is triggered with a strong weekly close on the Hong Kong listed SHUN TAK HOLDING. Price chart of the stock completed a year-long text book H&S bottom. White long candlestick on the weekly scale chart not only cleared the year-long horizontal resistance but also recorded a high volume adding to the strength of the weekly scale breakout. H&S bottom chart pattern price target stands at 3.35 levels. A stop-loss is placed at 2.70 levels, slightly below the horizontal resistance (neckline). Tech Charts twitter followers can find all past breakout signals under the hashtag #TECHCHARTSALERT

SHUN TAK HOLDING weekly scale price chart

SHUN TAK HOLDING daily scale price chart

Two stock charts are preparing for a long-term change in trend. Both names are in the Tech Charts watchlist. Breakout on these securities will trigger a chart pattern breakout signal and will be considered for possible long trades. Tech Charts twitter followers can find stocks that are in the watchlist under the hashtag #TECHCHARTSWATCHLIST China Galaxy Securities is a financial company listed in Hong Kong. The stock price is forming a year-long ascending triangle with the strong horizontal resistance standing at 8.10 levels. Breakout above 8.10 can confirm the ascending triangle as a reversal and suggest higher levels. Kingston Financial is also listed in Hong Kong. Stock price is challenging the upper boundary of a year-long symmetrical triangle. Breakout above 3.75 levels can start a new uptrend.

CGS weekly scale price chart

KINGSTON FINANCIAL weekly scale price chart

GERMANY DAX INDEX

November 20, 2016/0 Comments/in DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel Kibar

Germany’s DAX Index is forming a 4 month-long rectangle chart pattern. Rectangles are classified as continuation chart patterns. Breakouts are usually in the direction of the previous trend. Since the beginning of 2016, DAX index is in a uptrend. Since mid-August the index has been in a sideways consolidation between 10,200 and 10,800. The index tested the upper boundary of the rectangle for four times over the past four months. Breakout above 10,800 will be positive and suggest higher levels. Chart pattern price target stands at 11,400 levels.

WEEKLY SCALE PRICE CHART OF DAX INDEX

DAILY SCALE PRICE CHART OF DAX INDEX

There are DAX index futures contracts and index ETFs to trade the price action on the possible breakout. Below is the price chart of the Ishares DAX UCITS ETF (in EUR) listed in Germany. It is one of the most liquid instruments that tracks the performance of the DAX 30 index. On the Ishares DAX UCITS ETF, upper boundary of the rectangle stands at 94.60 levels.

DAILY SCALE PRICE CHART OF ISHARES DAX UCITS ETF

ACWI and EEM

November 16, 2016/0 Comments/in DEVELOPED MARKET EQUITIES, EMERGING MARKET EQUITIES, Uncategorized/by Aksel Kibar

Since the election in the first week of November, U.S. equities had a strong performance. Though, strong rally in U.S. equities has been limited to very few sectors. ACWI ETF (underlying instrument: MSCI All Countries World index that tracks the performance of the 23 developed and 23 emerging markets) has been in a correction since the beginning of September. EEM ETF (underlying instrument: MSCI Emerging Markets index) broke down two major support levels, a year-long upward trend line and a horizontal support at 35.88 levels.

There is a possibility of the latest downward trend channel to form a flag continuation and breakout higher without breaching the year-long uptrend on the ACWI ETF. However, failure to do so can result in a similar price action that we have seen on the EEM; a breakdown of the year-long trend line support. Both charts suggest that equity market strength is limited to U.S. equities and in the U.S. markets it is limited to very few sectors.

ACWI ETF weekly scale price chart

ACWI ETF daily scale price chart

EEM ETF weekly scale price chart

S&P 500 INDEX and VIX

October 30, 2016/0 Comments/in DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel Kibar

S&P 500 INDEX weekly scale price chart

S&P 500 index is resting on the 2 year-long support/resistance level. Breakout to all time highs in July 2016 was followed by a weak rally in July-August period. Since mid-August the index has been in a sideways consolidation. The pull-back reached the previously broken resistance at 2,120 levels. Price action in the September-October period can be identified as a descending triangle with the horizontal boundary (support) standing at 2,120 levels. Over the past two months the S&P 500 index tested the strong support for 3 times. Breakdown below 2,120 levels will signal further correction for the U.S. Equities.

CBOE Volatility index is consolidating between 13 and 17 levels. Breakdown below 2,120 on the S&P 500 index could also result in a breakout on the VIX. The level to watch on the CBOE VIX is 17.35. If S&P 500 index manages to hold above 2,120 levels, last two months sideways consolidation will be labelled as a pull back and we will expect new highs in the coming months. In that case 17-18 area should become a medium term high for the CBOE VIX.

S&P 500 INDEX daily scale price chart

CBOE VOLATILITY INDEX daily scale price chart

ENERGY and EQUITIES

October 9, 2016/0 Comments/in COMMODITIES, DEVELOPED MARKET EQUITIES, Uncategorized/by Aksel Kibar

WTI CRUDE OIL and BRENT CRUDE OIL prices are developing bullish chart patterns. Year-long inverse H&S chart patterns are close to completion. Both WTI Crude and Brent Crude are challenging their necklines. For Brent Crude oil the year-long horizontal resistance stands at $52 levels. For WTI, the neckline stands at $50 levels. Breakout above the strong resistances can push prices towards $70 levels in the following months. $70 is the possible H&S bottom price target.

WTI CRUDE OIL weekly scale price chart

BRENT CRUDE OIL weekly scale price chart

Similar bullish technical outlook can be identified on several equities in the energy sector and energy related exchange traded funds. Below are some of the equities from Tech Charts watchlist. Note: According to Edwards & Magee a breakout is confirmed when a stock records a daily close above the resistance by 3% margin. Levels on the charts below take this guideline into consideration.

OMV AG an Austria based integrated oil and gas company forms a year-long symmetrical triangle. Stock has been challenging the upper boundary of its consolidation. Breakout above 26.5 levels should generate fresh chart pattern breakout signal.

CHINA OIL & GAS Group limited is a Hong Kong based investment holding company principally engaged in natural gas and energy-related businesses. A decisive close above 0.65 will confirm breakout from year-long H&S chart pattern.

PREMIER OIL is an independent exploration and production company with oil and gas interests in the North Sea, South East Asia, Pakistan, the Falkland Islands and Latin America. The company is engaged in the business of upstream oil and gas exploration and production. Since the beginning of May 2016 the stock has been forming a rectangle (continuation) chart pattern with the boundaries between 59.75 and 80.35. A decisive close above 82.40 will confirm breakout from the 6 month-long rectangle chart pattern.

CANYON SERVICES GROUP provides stimulation and fluid management services to oil and gas exploration and production companies operating in the Western Canadian Sedimentary Basin. The company’s segments include Pressure Pumping Services and Fluid Management Services. Price chart of the, Toronto Stock Exchange listed Canyon Services has a text-book H&S bottom chart pattern. Year-long base formation has a horizontal resistance (neckline) at 5.87 levels. A decisive close above 6.05 will confirm breakout from the year-long H&S bottom.

HALLIBURTON COMPANY is a provider of services and products to the upstream oil and natural gas industry. Price chart of the U.S. energy stock formed an inverted triangle with the horizontal boundary standing at 46.85 levels. Over the past 4 months, the resistance was tested 3 times. Breakout above 48.30 levels will complete the multi month consolidation.

LAREDO PETROLEUM is an independent energy company focused on the acquisition, exploration and development of oil and natural gas properties, and the transportation of oil and natural gas from such properties primarily in the Permian Basin in West Texas. Price chart of Laredo Petroleum is forming a year-long H&S bottom with the neckline standing at 13.70 levels. A decisive close above 14.15 levels will confirm breakout from the bullish base formation.

HELIX ENERGY is an international offshore energy services company. The company provides services to the offshore energy industry with a focus on well intervention and robotics operations. Price chart of HELIX ENERGY formed a 5 month-long symmetrical triangle. Breakout is underway with the strong weekly close of last week’s price action.

GEOSPACE TECHNOLOGIES CORP designs and manufactures instruments and equipment used in the oil and gas industry to acquire seismic data in order to locate, characterize and monitor hydrocarbon producing reservoirs. GEOSPACE TECHNOLOGIES formed a year-long H&S bottom with the neckline standing at 19 levels. A decisive close above 20 levels will confirm breakout from the multi-month bullish chart pattern.

ISHARE GLOBAL ENERGY ETF is an exchange traded fund listed in the NYSE. The price chart of the energy ETF has a similar year-long H&S bottom with the neckline standing at 33.15 levels. A decisive close above 34.10 will confirm breakout from the multi-month base formation. The right shoulder of the H&S bottom can be identified as a rectangle with the boundaries standing at 30.50 and 33.15.

S&P 500 INDEX and MSCI ACWI

September 25, 2016/3 Comments/in DEVELOPED MARKET EQUITIES, EMERGING MARKET EQUITIES, Uncategorized/by Aksel Kibar

Over the past two weeks, global equity markets rebounded from strong support levels. Last two week’s recovery came after the S&P 500’s pull back to its long-term support level at 2,125 levels. Long-term charts of S&P 500 index and a broader representation of global equity market performance, the MSCI ALL COUNTRIES WORLD INDEX, possibly completed a re-test of the broken resistance/support levels. Once a resistance is cleared it becomes support and vice versa.

S&P 500 index, a benchmark for large cap US equities broke out of a year-long sideways consolidation in mid-July. After reaching 2,193 levels in mid-August, the index pulled back to test the broken resistance at 2,125 levels. Both the year-long upward trend line and the horizontal support held well and the index rebounded without any technical damage to the long-term trend. Unless the markets reverse once again to challenge the support at 2,125 levels, we will claim the latest price action was a pullback and is likely to be followed by a resumption of the long-term uptrend.

Monthly scale price chart of S&P 500 index

Weekly scale price chart of S&P 500 index

MSCI ALL COUNTRIES WORLD INDEX captures large and mid cap representation across 23 Developed Markets and 23 Emerging Markets countries. With 2,481 constituents, the index covers approximately 85% of the global investable equity opportunity set. Please note that iShares has an MSCI ACWI ETF that seeks to track the MSCI ALL COUNTRIES WORLD INDEX.

In mid-July MSCI ACWI, similar to S&P 500 index, completed a significant chart pattern. A year-long H&S continuation chart pattern was completed with a breakout above 410 levels. Since then the index possibly completed a pull back to the neckline of the H&S chart pattern. Last week’s sharp reversal increased the likelihood of a continuation towards 443 levels. Unless the index reverses to challenge the support at 405 levels, we will identify the latest price action as a pullback that is likely to be followed by a resumption of the long-term uptrend.

Monthly scale price chart of MSCI ACWI

Weekly scale price chart of MSCI ACWI

If global equity indices mentioned above resume their uptrends, we are likely to see fresh new highs on several individual securities. Financial media usually pays attention to 52 week highs as a measure of security’s strength. There is even a better way to look at this; all-time highs. It is usually difficult for investors to buy stocks that are reaching their all-time highs. But usually the most promising part of an uptrend starts when a stock moves into uncharted territory in other words all-time highs. Below are some of the stocks on my watch-list that are likely to breakout to all-time highs and some that are likely to record 52 week highs. These stocks formed clear bullish chart patterns with identifiable horizontal boundaries. Breakouts will not only complete the chart patterns but also will push the stocks to all time highs and 52 week highs.

U.S. & CANADA

EUROPE

JAPAN & HONG KONG

CHINA SSE 5O INDEX

August 13, 2016/0 Comments/in EMERGING MARKET EQUITIES, Uncategorized/by Aksel Kibar

Chinese equities might be on the verge of a strong breakout. This week’s price action pushed the SSE 50 Index to the horizontal resistance at 2,225 levels. Since the beginning of 2016, SSE 50 has been recording higher lows, a bullish signal. Another week of strong price action can clear the 8 month-long resistance and push the index towards 2,500 levels. Volatility is low both on the daily and weekly charts suggesting a trend period might develop after a decisive breakout.

There are several bullish chart set-ups in Hong Kong listed securities. I share below some of the clear chart patterns that are likely to resolve on the upside if we see a breakout on the Chinese benchmark equity index.

MGM CHINA formed a year-long H&S bottom, a bullish reversal chart pattern, with the neckline standing at 12.20 levels. Breakout above 12.20 can push the stock higher to test 17-18 area.

TONGDA GROUP formed a year-long ascending triangle, a bullish continuation chart pattern, with the strong horizontal resistance standing at 1.69. Breakout above 1.69 can push prices towards 2.0 levels.

PING AN is now testing the horizontal resistance at 38.80. Stock closed slightly above the resistance. However, this week’s price action will confirm the breakout. Another strong weekly close will complete the multi-month base formation.

Note: According to Edwards and Magee, a daily close above the resistance by a 3% margin is required to confirm a breakout. I follow this approach to confirm a breakout.

HONG KONG – SUNAC CHINA HOLDING

SUNAC CHINA HOLDING (1918.HK)

GERMANY DAX INDEX

PORSCHE AUTO HOLDING (PSHG_p.DE)

METASTOCK

HONG KONG and CHINA

GERMANY DAX INDEX

ACWI and EEM

S&P 500 INDEX and VIX

ENERGY and EQUITIES

S&P 500 INDEX and MSCI ACWI

CHINA SSE 5O INDEX

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