Market Technical View is a blog that mostly concerns the technical analysis of different financial instruments like indices, commodities, stocks, ETFs and currencies.

All the posts are structured in 3 main chapters that can be found in Content, in the upper right-hand corner of the blog.

Market perspective. The technical approach consists of chart patterns and important support/resistance zones. The purpose of this section is to give directions of the price on short and medium term (a few days up to a few months).

Trading setups. The analysis posted here will provide trading scenarios based on different technical tools.

Romanian Market. This is a section dedicated to Romanian stocks and indices.

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Friday, June 1, 2012

Bank of America (BAC) - reversal pattern. 2012.06.01

Bank of America shares broke out of the descending channel a few days ago and the T1 trend line was already tested as a support yesterday.

Moreover, the volume was high (33.1 M) on a bullish day and all of the technical clues are pointing now towards a reversal. The first target is in the $8.10 area, followed by the $10.00 level on a mid-term scenario. The first resistance stands at the $7.50 level.

Although the technical perspective is favoring a bullish reversal, the investors must consider the weak economic data from Europe (euro-area unemployment at 11% and record low yields on germen bonds) that could affect the US markets as well, especially the banks and most of all Bank of America due to its low cost/share (below $10.00).      

Monday, May 28, 2012

S&P 500 Summer Analysis. 2012.05.28

The last 20 years mostly represented a sideways market as the S&P 500 Index shows in a weekly chart. The years of 2000 and 2007 were major peaks in the stock market while the years of 2002 and 2009 marked the major market lows of the past 12 years.

The chart below shows the Index evolution of the May-October period of each year since 1992. In 14 out of the 20 cases, the market rose during the selected period but if we eliminate the bull market of the 90’s, the number of wins and the number of loses of the same period are approximately the same.
As the presidential elections in the US are thought to be one of the main drivers of the market in the election years, 2012 is challenging the investors with the same question as the 2008, 2004 and 2000: Is this summer going to by shallow and “red” or will it be “green” and full of life?

Without even checking the fundamental market conditions of the previous election years, we can state that 2012 is definitely different. Europe is facing a totally new issue that the leaders are trying to solve for two years: sovereign debt. Greece, Portugal, Spain, Italy and Ireland and the EU countries that are closely watched by the whole world as they are having a tough time paying their debts and refinancing themselves.

Going back to the evolution of the S&P in the May – October period, we can notice that a clear trend has rarely occurred. Most of the past examples are showing at least one short term reversal. If we narrow down our research, we can see that out of the 5 election years, none had a sharp up/down trend.  

UUP ETF - Resistance Break! 2012.05.28

A quick look into the UUP ETF shows how the Dollar is ready to break decisively above the $22.76 key resistance level and lead to further strength of the US currency.

After it created a broad base last summer in the $21.00 area, the investors pushed the UUP shares above $17.00 and traded in a range between $17.00 and $22.80 until now.

The $22.80 level represents the 38.2% retracement level of the June 2010 – May 2011 descent and the break of it triggers the next target at the 50% retracement level, in the $23.35 area. This level is also a previous local low and high.

S&P500 Index direction. 2012.05.28

S&P 500 Index closed last week up by 1.74%, creating though a local bottom in the $1.292-$1.300 area.

As mentioned in previous analysis, the short term resistance is at $1.325 and an eventual break of it will set the market for further growing towards the $1,353 level which represents the 50% Fibonacci retracement of the May decrease.

In spite of the overall negative sentiment in Europe, the market could raise until the new elections in Greece that will take part in the middle of June.