Jeffrey's Technical Analysis

Final post

2012-09-04T23:23:00.002+08:00

I have lost my remote access to my school's Reuters terminal for drawing charts, and I currently do not have any decent programs to do so; therefore, I have to stop posting. This blog will remain as educational purpose.

If you would like to have idea exchange with me, please feel free to email me: jeffrey.scw@gmail.com

Good luck and all the best to all of you.

Big Vol (2012-09-03 HSI analysis)

2012-09-03T07:31:00.000+08:00

Last week global markets dropped a bit, while Hong Kong market slumped. US market closed higher last Friday, so HSI should follow and opened high today. However, the over trend is still quite bearish.

This week there will be some rate decisions and unemployment rates released that can affect the stock market, but they won't be expected to give great impact. Instead, these days its all about the sudden news from Europe and so we have to react fast to the news.

Let's see this week's HSI.

Daily chart of HSI:

On daily chart, it seems like the 50-day SMA has failed to support the index, and the next support would be at 19300 given by the up trend-line these few months which should be quite strong.

Currently it is hard to guess whether there will be a breakdown below the green line; we would have to keep looking at it to see how it is going to be.

Other than this, there seems not much other meaningful hints on this chart.

Weekly chart of HSI:

On weekly chart, the index just fell below the moving averages, and the support given by the flag is at around 19000. Therefore, 19000-19300 would be a strong support zone for HSI.

Even if HSI falls below 19300, on daily chart we would have to be aware of false breakdown as there is support at 19000 on weekly chart.

Another observation is that on weekly chart, the three Simple Moving Averages converge and touch each others. This is a big hint of big volatility following. If allowed, it might be a good time to long volatility through either option strategies or VIX on HSI.

Better closely watch the market or you may lose a great chance.

Important Economic data this week (2012-09-02)

2012-09-02T11:57:00.001+08:00

3-Sept (Monday)
16:30 UK PMI Manufacturing {Forecast: Slight increase}

4-Sept (Tuesday)
12:30 Reserve Bank of Australia Rate Decision {Forecast: Unchanged}
13:45 Switzerland GDP (YoY) {Forecast: Drop to 1.6% from 2.0%}
17:00 Euro-Zone Producer Price Index {Forecast: Decrease}
22:00 US ISM Manufacturing {Forecast: Slight increase}

5-Sept (Wendesday)
09:30 Australia GDP (YoY) {Forecast: Drop to 3.7% from 4.3%}
21:00 Bank of Canada Rate Decision {Forecast: Unchanged}

6-Sept (Thursday)
09:30 Australia Unemployment Rate {Forecast: Rise to 5.3% from 5.2%}
17:00 Euro-Zone GDP (YoY) {Forecast: Unchanged}
19:00 UK BOE Rate Decision {Forecast: Unchanged}
19:45 European Central Bank Rate Decision {Forecast: Decrease to 0.50% from 0.75%}

7-Sept (Friday)
20:30 Canada Unemployment Rate {Forecast: Unchanged}
20:30 US Change in Non-farm Payrolls {Forecast: Drop to 127K from 163K}
20:30 US Unemployment Rate {Forecast: Unchanged}

Time Zone: GMT+8 (HKT)
Source: http://dailyfx.com

Go, Gold (2012-08-30 Gold analysis)

2012-08-30T07:32:00.000+08:00

Above is the daily chart of gold (XAU=). It has broken many major supports and is going to set off. Would be a good chance for long positions.

Dropping Aussie (2012-08-29 AUD analysis)

2012-08-29T06:51:00.000+08:00

Above is the 4-hour chart of Aussie (AUD=). After breaking down the red up-trend, the direction has reversed and it should keep on dropping.

Still a bearish week (2012-08-27 HSI analysis)

2012-08-27T07:50:00.000+08:00

Last week was another boring week with very low volume. This definitely was not a good time for most traders. The market was full of both good and bad news, so they kind of canceled out each other.

Hang Seng Index (HSI) dropped after reaching the resistant I mentioned in last two weeks. Dollar also went down after I have posted the divergence post about DXY. Gold broke out as I have predicted too, reaching as high as 1675 which is expected to go higher if the breakout of the resistant line is confirmed.

This week there is not many important economic data released, but we have to be prepared of the possibility that US or Europe will be going to say something about the economy. Read fast and respond fast.

Let's see this week HSI.

Daily chart of HSI:

After reaching the purple resistant line two weeks ago, HSI started to turn its direction and slowly moved to lower levels. Last Friday, it dropped below 20-day Simple Moving Average (SMA).

As US markets wasn't doing too bad last Friday, HSI is expected to open higher. 20-day SMA is anticipated to resist the index at around 20000.

If the index could not break this level, the break down will be confirmed. There is only support until 50-day SMA at around 19570 and ultimate support is at 19200 only daily chart.

Weekly chart of HSI:

Weekly chart gives a clearer view. HSI started to fall after touching the red resistant line. The SMAs are converging and together with the Fibonacci retracement they will be giving support at around 19600.

If the index reaches 19600, it seems like it will be supported and will tend to break out of the red resistant line. Of course this would depend on the volume at that time, but it looks like the trend.

Nevertheless, the trend this week is still bearish. It would have to be revised after reaching 19600.

Important Economic data this week (2012-08-26)

2012-08-26T10:14:00.000+08:00

28-Aug (Tuesday)
22:00 US Consumer Confidence {Forecast: Slight increase}

29-Aug (Wednesday)
20:00 Germany CPI (YoY) {Forecast: Slight increase}
20:30 US GDP (Annualized) {Forecast: Rise to 1.7% from 1.5%}

30-Aug (Thursday)
15:55 Germany Unemployment Rate {Forecast: Unchanged}
20:30 US Personal Consumption Expenditure Core {Forecast: Slight drop}

31-Aug (Friday)
20:30 Canada GDP (YoY) {Forecast: Slight drop}

Breaking out ? (2012-08-23 Gold analysis)

2012-08-23T07:45:00.000+08:00

Above is the weekly chart of gold (XAU). It has reached a strong resistant at this moment, but it looks like it would be breaking out very soon given that it has recently broken out a little rectangle and the MACD looks not too bad.

Obvious divergences (2012-08-21 DXY analysis)

2012-08-21T07:46:00.000+08:00

Above is the daily chart of US Dollar Index (DXY). It seems like it is going to plunge, which means Euros, Pounds and Yens would surge.

Still Bearish view (2012-08-20 HSI analysis)

2012-08-20T07:42:00.000+08:00

Last week despite the economic data released, the stock market basically moved sideways without big fluctuations. Volume continued to be really low as investors mostly decided to think twice before acting in the markets.

Hang Seng Index reached the resistant line two weeks ago, but last week it did not plunge. The index remained near the resistant line, but since there is no any good catalyst for boosting it, long positions are still very risky.

Daily chart of HSI:

Daily chart did not change much compared with that posted last week. After reaching the resistant provided by both the Fibonacci level and the trend line, the index moved sideways and could not break out.

It is currently being supported by the 10-day SMA. However, as the support is not expected to be strong, it is quite likely that the index would drop below the current level.

Also, volume remained low which implies that the index does not have enough power to breakout. It would need some more time to save power.

Weekly chart of HSI:

Weekly chart did not change much as well. The index is currently at the resistant line and cannot break out.

With lowered volume, chance of plummeting is high. The SMAs are converging and will give support at around 19500.

Then, strong and ultimate support will be at 18650 and 17800, though they are still too far to be considered.

So this week it should be a bearish week. Or at least it will move sideways.

Important Economic Data this week (2012-08-19)

2012-08-19T07:46:00.002+08:00

21-Aug (Tuesday)
09:30 Australia Reserve Bank Board August Minutes

22-Aug (Wednesday)
20:30 Canada Retail Sales {Forecast: Drop to 0.1% from 0.3%}

23-Aug (Thursday)
02:00 US Fed Releases Minutes from August 1 FOMC meeting
10:30 China HSBC Flash Manufacturing PMI
14:00 Germany GDP (YoY) {Forecast: Unchanged}
16:00 Euro-zone PMI {Forecast: Unchanged}

24-Aug (Friday)
16:30 UK GDP (YoY) {Forecast: Rise to -0.6% from -0.8%}
20:30 US Durable Good Orders {Forecast: Increase to 2.5% from 1.3%}

Vol might break out (2012-08-17 VIX analysis)

2012-08-17T07:45:00.000+08:00

Above is the daily chart of volatility index (.VIX). The index recently plunged to all-time low and bounced to resistant level. From the chart, it looks like it would be going to break out, though the breakout signal is not very strong.

Dropping Euros? (2012-08-15 EUR analysis)

2012-08-15T08:25:00.000+08:00

Above is the 4-hour chart of Euros (EUR=). The 17-nation currency is currently moving within a flag with narrowing range, and is going to break out either side. On the chart, we can observe MACD and RSI divergences, which tell us that the price of Euros would probably go lower due to lack of momentum. If the break down is confirmed, by Fibonacci project the target price would be at as low as 1.16. Good luck.

A bear week (2012-08-13 HSI analysis)

2012-08-13T07:06:00.000+08:00

After two-week of busy days packed with applying jobs and writing dissertation, finally I have some time to watch the markets and update this blog (though the two are still not done). Anyway, last week Hang Seng Index reached its resistant and fell. It looks like it still does not have enough momentum to break out.

This week there will be lots of economic figures being revealed including GDPs and CPIs. The charts suggest that the data would be pretty negative leading to another plunge of the stock markets in the globe.

Let's take a look at this week's HSI.

Daily chart of HSI:

The index reached the red solid trend line and 23.6% Fibonacci level last week and was resisted. Volume was low despite the surge which suggests that HSI probably would slump.

Obviously going into long position at this moment would be extremely risky. On the other hand, the index is very likely to fall quite a lot as there is no strong support nearby.

Next support shown on daily chart would be at 19300 which is the 50-day Simple Moving Average. 10-day and 20-day SMAs look pretty weak these days. Given that the current level is 20100, it is likely that the index would drop 800 points.

Ultimate support is given by the green solid trend line at around 19000. So 19000-19300 will be a very strong support zone to the index.

Weekly chart of HSI:

On weekly chart, though the red trend line is different from that on daily chart, this line also contributed to resisting the index from going higher last week.

As suggested above, HSI has no momentum to go any further and that it would fall. If so, the simple moving averages will start to converge and provide a support at around 19500, which is also the 38.2% retracement level.

There will be strong support at 18600 and ultimate support is at 17800, the first one might be an "intra-week" low as daily chart suggests strong support at 19000.

Both daily chart and weekly chart suggest that the index would fall, so if the index does not open very low today, it might be a good idea to enter short positions. The upside risk is very limited. Stop loss is of course break out of the resistant line but it is quite unlikely.

Important Economic Data this week (2012-08-12)

2012-08-12T09:32:00.000+08:00

13-Aug (Monday)
07:50 Japan GDP Annualized {Forecast: Drop to 2.3% from 4.7%}

14-Aug (Tuesday)
14:00 Germany GDP (YoY) {Forecast: Drop to 0.9% from 1.7%}
16:30 UK CPI (YoY) {Forecast: Slight drop}
17:00 Euro-Zone GDP (YoY) {Forecast: Drop to -0.4% from -0.1%}
20:30 US Advance Retail Sales {Forecast: Rise to 0.3% from -0.5%}

15-Aug (Wednesday)
16:30 UK Jobless Claims Change {Forecast: Slight drop}
20:30 US CPI (YoY) {Forecast: Slight drop}

16-Aug (Thursday)
17:00 Euro-Zone CPI (YoY) {Forecast: Unchanged}

17-Aug (Friday)
14:00 Germany Producer Prices (YoY) {Forecast: Drop to 1.2% from 1.6%}
20:30 Canada CPI (YoY) {Forecast: Slight rise}
21:55 US U. of Michigan Confidence {Forecast: Very slight drop}

Need to catch up

2012-07-30T03:04:00.000+08:00

Finally I am back at Hong Kong and would continue my dissertation here. As I didn't spend much time on stock market last week, it should be better for me to catch up with stuff this week before posting any analysis. Good luck to all of you.

Not going to be a good week (2012-07-23 HSI analysis)

2012-07-23T07:38:00.002+08:00

Daily chart of HSI:

On daily chart, the index is still under the upward flag as mentioned before. The lower bound for the flag has become a strong resistant to the index. However, as the line is increasing, the conclusion we can draw is the index will not surge greatly.

Strong support is still at 18000 on daily chart. Besides that, there seems to be no other major supports underneath. Let's see weekly charts for more hints.

Weekly chart of HSI:

The index is still within the two boundaries, green and red solid lines. They give strong support and resistant at 18500 and 20400 respectively.

HSI was supported by the 10-week Simple Moving Average two weeks ago and surged last week. It has now reached the 50-week SMA so we can see whether it can resist the index.

Combining the two charts, it looks more likely for the index to plunge this week, given the resistant from the flag on daily chart and 50-week SMA on weekly chart. Support is at 19000 given by 10-week SMA on weekly chart, but it is expected to be weaker than before.

Important Economic Data this week (2012-07-22)

2012-07-22T07:45:00.001+08:00

24-July (Tuesday)
20:30 Canada Retail Sales {Forecast: Increase to 0.5% from -0.5%}

25-July (Wednesday)
09:30 Australia CPI {Forecast: Decrease to 1.3% from 1.6%}
16:30 UK GDP (QoQ) {Forecast: Decrease to -0.3% from -0.2%}

26-July (Thursday)
20:30 US Durable Goods Orders {Forecast: Drop to 0.3% from 1.3%}

27-July (Friday)
20:00 Germany CPI {Forecast: Unchanged}
20:00 US GDP {Forecast: Drop to 1.4% from 1.9%}

Time Zone: HKT (GMT +8)
Source: http://dailyfx.com

Break very soon (2012-07-19 Gold analysis)

2012-07-19T07:21:00.002+08:00

Above is the daily chart of Gold price (XAU=). The price should be breaking very soon, but till now we don't have enough hints to know which way it will be going. The only thing to do is to wait and see how it is moving.

GBP Breakout? (2012-07-17 GBP analysis)

2012-07-17T10:18:00.000+08:00

Above is the 4-hour chart of GBP/USD (GBP=). The price has just broken out of the recent downwards channel, and if it remains above the upper purple line for a few hours, the breakout will be confirmed. Next resistant is at around 1.578 which is the 50% retracement level.

Levels to be aware of (2012-07-16 HSI analysis)

2012-07-16T07:31:00.000+08:00

Recently I am busy working on my dissertation and therefore I do not have much time to keep track of the stock markets and might update less frequently.

Last week global stock markets plunged, but US markets rose on Friday. Therefore, Asian markets are expected to open high today. This week numbers for CPIs are coming out but they do not have big influences on stock markets. Events to be aware of is when US Fed releases reports, on Tuesday, Wednesday and Thursday. Bernanke might have some speeches that affect the markets greatly.

Let's see how Hang Seng Index (HSI) should be moving this week.

Daily chart of HSI:

The index finally breaks the upward-trending flag, to a lower level. Given the rise in US markets last Friday, HSI should be rising today and is going to test again the lower line.

Resistant is found at around 19450, if the index closes above the line, the breakdown would be fake and it would continue moving within the flag.

However, if breakdown confirms, it seems like there is no strong support until 18000 on daily chart. We need weekly chart to help identify any possible support in between.

Weekly chart of HSI:

On weekly chart, the index is supported by 10-week Simple Moving Average. We would have to see whether the index would breakdown of this support this week.

A shorter-term support is found at around 18400. So if breakdown confirms on daily chart, 18400 will be the next support.

As usual, the red dotted line shows a strong resistant at 20400 and the green dotted line gives strong support at 17800 (which means that 17800-18000 is strong support zone).

So good luck to all of you.

Important Economic Data this week (2012-07-15)

2012-07-15T09:56:00.000+08:00

16-July (Monday)
17:00 Euro-Zone CPI {Forecast: Unchanged}
20:30 US Advance Retail Sales {Forecast: Rise to 0.2% from -0.2%}

17-July (Tuesday)
06:45 New Zealand CPI {Forecast: Drop to 1.1% from 1.6%}
16:30 UK CPI {Forecast: Unchanged}
20:30 US CPI {Forecast: Drop to 1.6% from 1.7%}
21:00 Bank of Canada Rate Decision {Forecast: Unchanged}
22:00 US Fed's Bernanke Delivers Monetary Policy Report to Senate

18-July (Wednesday)
16:30 UK Jobless Claims Change {Forecast: Drop to 5.0K from 8.1K}
22:00 US Fed's Bernanke Gives Semiannual Report to US House

19-July (Thursday)
02:00 US Fed Releases Beige Book Economic Survey

20-July (Friday)
14:00 Germany Producer Prices {Forecast: Drop to 1.8% from 2.1%}
20:30 Canada CPI {Forecast: Rise to 1.8% from 1.2%}

Time Zone: GMT +8 (HKT)
Source: http://dailyfx.com

Target not yet reached (2012-07-13)

2012-07-13T09:21:00.000+08:00

Above is the daily chart of Cheung Kong (0001.HK). After breaking out from the head-and-shoulder inverse pattern, it seems like it hasn't reached its target yet. Due to the poor market yesterday it has just dropped to its strong support level, and there is good chance that it will rebound to the breakout target.

Going to breakout? (2012-07-11 Gold analysis)

2012-07-11T08:29:00.003+08:00

Above is daily chart of Gold (XAU=). It has just reached the lower bound of the current flag, and it will probably surge and test the resistant again. Given the movement of MACD, it looks like it is going to break out upwards from the current flag.

Drop and rise? (2012-07-10 DXY analysis)

2012-07-10T08:44:00.001+08:00

Above is 4-hour chart of USD Index (DXY). It looks like it would drop in short time because of the bearish cross in MACD, but its upward trend hasn't vanished given the MACD bullish divergence. So let's keep track of it and see when it will drop to a good support for us to take long positions.