Thursday, September 20, 2012
Wednesday, June 6, 2012
Home Depot (HD) - Resuming correction. 2012.06.06
Home Depot shares price reached the $50.00 area by the end
of May but the bears proved to be stronger and pushed the price down for what
it could turn into a three wave correction on the mid-term.
As expected in the previous analysis (
http://markettechnicalview.blogspot.ro/2012/05/home-depot-inc-hd-in-mid-term.html ) the rise in the end of May formed the middle move of the zig-zag corrective
pattern. The price move of the last few weeks is more and more resembling with
an AB=CD pattern that aims for the $43.40-$44.00.
The T1 trend line is acting as a good support for the price
and it ties in with the 38.2% retracement level of the August 2011 –April 2012 ascending
move.
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.
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