What a loss.
Free technical analysis on Hong Kong stock market, world stock markets, foreign exchange market, commodities market, as well as some important notes for being a successful trader.
Thursday, April 28, 2011
Where is the ground? (2011-04-28 DXY analysis)
You might have probably well understood the increased volatility of the stock market. Yesterday HSI surged around 1% in the morning but then dropped and closed at -0.48%. This is due to the broadening trading range of the index as mentioned on Tuesday.
Though neither the upper nor the lower boundary was reached, we could see that there were pretty equivalent amount of investors of both sides. That's why the market kept on fluctuating until there is some breaking news converging the views of investors.
Recently people have been talking about the Dollar. Let's see.
Above is the daily chart of US Dollar Index (.DXY). It has been sliding downwards for three months. Few days ago the dollar even broke the previous low in late 2009 which is treated as a strong support to the index, due to the expectation that the Fed would keep the interest rate at almost zero, as well as further Quantitative Easing might be implemented.
Along with the weakening of US Dollar, many countries are put in a disadvantageous position as their trades with US will be altered. Exports to US would drop significantly while imports from US would boost. Officials in emerging countries, especially those relying heavily on exports, are somehow expected to come out and speak as an attempt to stop the Dollar from infinitely weakening.
On the chart, however, I still could not find the ground for the index. A possible support in near future would be at 73, but it is not that strong. An extremely strong support will be at the low in early 2008 which is at around 71. In this case, the dollar would have dropped almost 20% since the high in mid 2010.
Resistance, on the other hand, exists at many levels, provided by the red, purple and green trend-lines as well as the previous low in late 2009.
It looks like we could still short USD as there is still no obvious obstacle blocking the down trend.
Wednesday, April 27, 2011
Narrow trading range (2011-04-27 3823 analysis)
Above is the daily chart of Tech Pro Technology Development Ltd. (3823.HK). The Company and its subsidiaries are principally engaged in the manufacture and sales of aluminium electrolytic capacitors and V-chip type aluminium electrolytic capacitors.
By technical analysis, we can see that the stock price was in trading range for three months, after a pass-through of the red triangle (there was no breakout).
The trading range is around 1.70-1.85. These two levels indicate the boundaries which resist/support the stock price.
We can see that there were a few candles with long lower shadow recently. The price is still beautifully kept within the range, but the long lower shadow implies that the buying-force is quite strong here.
If the price breaks out 1.85, the surge of price could be extremely great. We can keep an eye on this stock.
Tuesday, April 26, 2011
In the middle again (2011-04-26 HSI analysis)
4-day holiday has ended. Hope you have enjoyed your vacation and taken a good rest. These four days were just too peaceful that nothing breaking happened. That's good anyway.
So as a start of this week, let's focus on the Hong Kong market in general.
Daily chart of Hang Seng Index:
This chart is similar to that last week. After reaching the red down-trend line and 50-day Simple Moving Average, which supported the index, HSI rebounced and closed above 24100.
The only factor remaining that possible affects HSI on the chart appears to be fibonacci retracement. We can see that 38.2% did successfully contribute to support the index too.
The index is currently in the middle of 0% and 23.6%. There is no obvious resistance and support here, so we have to see how it moves.
MACD just touches its EMA from below, having possibility to form bullish cross above zero level. This could be a good sign, but still we have to wait and confirm it.
Weekly chart of HSI:
Weekly chart is clearer this week. Actually it is just similar to that last week as well.
Green line represents long-term up-trend line and red is the short-term down-trend line. Same as last week, HSI is hanging in the middle again. This increases difficulty to judge what would happen this week.
Please be aware as well that the trading range is widening. This means that resistance will be higher and support will be lower.
This week's resistance will be at around 24,550 and support will be at around 23,500. So the volatility could possible surge as well.
So you would know what to do when the index reaches these levels.
So as a start of this week, let's focus on the Hong Kong market in general.
Daily chart of Hang Seng Index:
This chart is similar to that last week. After reaching the red down-trend line and 50-day Simple Moving Average, which supported the index, HSI rebounced and closed above 24100.
The only factor remaining that possible affects HSI on the chart appears to be fibonacci retracement. We can see that 38.2% did successfully contribute to support the index too.
The index is currently in the middle of 0% and 23.6%. There is no obvious resistance and support here, so we have to see how it moves.
MACD just touches its EMA from below, having possibility to form bullish cross above zero level. This could be a good sign, but still we have to wait and confirm it.
Weekly chart of HSI:
Weekly chart is clearer this week. Actually it is just similar to that last week as well.
Green line represents long-term up-trend line and red is the short-term down-trend line. Same as last week, HSI is hanging in the middle again. This increases difficulty to judge what would happen this week.
Please be aware as well that the trading range is widening. This means that resistance will be higher and support will be lower.
This week's resistance will be at around 24,550 and support will be at around 23,500. So the volatility could possible surge as well.
So you would know what to do when the index reaches these levels.
Friday, April 22, 2011
Thursday, April 21, 2011
Safe haven? (2011-04-21 XAU analysis)
Above is the daily chart of Gold (XAU). With the unstable world economies and currencies, investors were moving their funds to this safe haven, leading the price to reach above 1,500.
Last time I suggested that 1,500 would be a resistance for gold; however, it seems like there is no selling power at this point at all.
Instead, the price just broke out the short-term up-trend line (in red). This implies a further crazy surge for gold.
Purple and green lines are the other uptrend lines which would provide support to XAU, but they look relatively useless after the break out of red line.
By fibonacci retracement, 1,522 could possibly be the next resistance. Then the red line will be its support.
And I could not see any good reason for gold to fall back below the red line. So I am having a bullish view on it.
Wednesday, April 20, 2011
What does the largest component tell? (2011-04-20 HSBC analysis)
Hang Seng Index experienced a great slump yesterday, falling to 23,520 which is below the level suggested in weekly chart. Nevertheless, such break down could possibly be a false breakdown as there are still two trading days this week. We still have to see what happens next.
Why not check the benchmark stock in HSI then? Let's see the chart below for HSBC (0005.HK).
As the largest component in HSI, HSBC definitely contributed a lot to the tumble in the Hong Kong index in past two days. It even broke down its short-term uptrend line which is shown in red.
Other than the trend line, I have put a fibonacci retracement on the chart. The levels look influential, dont' they?
Firstly, HSBC consolidated a bit after the rise at the 23.6% level. Then the stock price could not make it above the 50% level, and topped at around 85.
So now it reaches the 23.6% again. I expect that this level would have a strong support to the stock price, and there would be a rebounce here.
For upside limit, 38.2% level looks weak, so the red uptrend line would be the one who could stop HSBC. The level is at around 84.
Once HSBC breaks down, I guess the next support will be as low as 78.
Good luck.
Why not check the benchmark stock in HSI then? Let's see the chart below for HSBC (0005.HK).
As the largest component in HSI, HSBC definitely contributed a lot to the tumble in the Hong Kong index in past two days. It even broke down its short-term uptrend line which is shown in red.
Other than the trend line, I have put a fibonacci retracement on the chart. The levels look influential, dont' they?
Firstly, HSBC consolidated a bit after the rise at the 23.6% level. Then the stock price could not make it above the 50% level, and topped at around 85.
So now it reaches the 23.6% again. I expect that this level would have a strong support to the stock price, and there would be a rebounce here.
For upside limit, 38.2% level looks weak, so the red uptrend line would be the one who could stop HSBC. The level is at around 84.
Once HSBC breaks down, I guess the next support will be as low as 78.
Good luck.
Tuesday, April 19, 2011
Bad news for stock markets (2011-04-19 DXY analysis)
Above is the daily chart of US Dollar Index (.DXY). Starting from Jan 2011, the index has been falling continuously, along the descending triangle (formed by green and red lines).
In late March, there appeared to have a little break out of the triangle; however, the index slumped again and reached the green line again in April, implying that it was back into the triangle again.
We can see that the index breaks out once again. This time it faces another short-term resistance (in purple) and the level of 75.4, which is the previous low.
Once US dollar could successfully break out, it appears to have bottomed and turn into bullish trend. Then, the stock markets would face a hard-time.
Monday, April 18, 2011
Easy week? (2011-04-18 HSI analysis)
After the great slump on Tuesday, last week Hong Kong market was under consolidation period, during which Hang Seng Index kept on rising and falling without significant overall change.
However, such sideway market leads to significant break down on daily chart, and no break out on weekly chart. Let's see what happened and what will happen.
Daily chart of HSI:
The red line is the short-term up-trend line which the index has been following for the previous month.
Last week, HSI finally could not hold above this red line and broke down. This implies that the short-term strong bullish trend has come to an end.
Luckily though, the index was supported at around 24,000, by both the 23.6% retracement and psychological effect, possibly as well as 20-day Simple Moving Average.
These factors look reliable, but once if HSI breaks down further, the next support will be at the level of 23,600 (the green line plus 38.2% retracement). This level will be even more reliable.
The upside resistance is of course the red line. Thanks to the fact that the slope of this line is pretty large, the resistance will be increasing in a high speed. So the resistance this week could possibly reach the previous high at around 24,450.
Weekly chart of HSI:
Weekly chart often offers a clearer image about the market. After reaching the red resistance, the index failed to break out and tumbled.
Currently it is hanging right in the middle of the diverging triangle (formed by the red and green lines). It is ambiguous whether it would continue forming black stick or reverse its direction.
The only things we know are both the resistance and support. Trading range will inevitably be widened, leading to a dropping support and a higher resistance.
For this week, resistance is still at around 24,450 and support is at around 23,600, which is also suggested in daily chart.
So besides the fact that we don't know how it would move, we are quite clear about both the upside and downside limits and could take actions easily once these levels are reached.
However, such sideway market leads to significant break down on daily chart, and no break out on weekly chart. Let's see what happened and what will happen.
Daily chart of HSI:
The red line is the short-term up-trend line which the index has been following for the previous month.
Last week, HSI finally could not hold above this red line and broke down. This implies that the short-term strong bullish trend has come to an end.
Luckily though, the index was supported at around 24,000, by both the 23.6% retracement and psychological effect, possibly as well as 20-day Simple Moving Average.
These factors look reliable, but once if HSI breaks down further, the next support will be at the level of 23,600 (the green line plus 38.2% retracement). This level will be even more reliable.
The upside resistance is of course the red line. Thanks to the fact that the slope of this line is pretty large, the resistance will be increasing in a high speed. So the resistance this week could possibly reach the previous high at around 24,450.
Weekly chart of HSI:
Weekly chart often offers a clearer image about the market. After reaching the red resistance, the index failed to break out and tumbled.
Currently it is hanging right in the middle of the diverging triangle (formed by the red and green lines). It is ambiguous whether it would continue forming black stick or reverse its direction.
The only things we know are both the resistance and support. Trading range will inevitably be widened, leading to a dropping support and a higher resistance.
For this week, resistance is still at around 24,450 and support is at around 23,600, which is also suggested in daily chart.
So besides the fact that we don't know how it would move, we are quite clear about both the upside and downside limits and could take actions easily once these levels are reached.
Sunday, April 17, 2011
Important Economics Data this week (2011-04-17)
18-April (Monday)
06:45 New Zealand CPI {Forecast: Increase by 0.6%}
19-April (Tuesday)
09?30 Australia Reserve Bank's Board Minutes
19:00 Canada CPI {Forecast: Increase by 0.6%}
20-April (Wednesday)
14:00 Germany Producer Prices {Forecast: Increase by 0.2%}
16:30 Bank of England Minutes
21-April (Thursday)
20:30 Canada Retail Sales {Forecast: Increase from -0.3% to 0.5%}
06:45 New Zealand CPI {Forecast: Increase by 0.6%}
19-April (Tuesday)
09?30 Australia Reserve Bank's Board Minutes
19:00 Canada CPI {Forecast: Increase by 0.6%}
20-April (Wednesday)
14:00 Germany Producer Prices {Forecast: Increase by 0.2%}
16:30 Bank of England Minutes
21-April (Thursday)
20:30 Canada Retail Sales {Forecast: Increase from -0.3% to 0.5%}
Saturday, April 16, 2011
Thursday, April 14, 2011
Waiting to breakout (2011-04-14 Hong Kong New World Development analysis)
Hang Seng Index surged greatly yesterday, and is going to test the resistance on weekly chart again, which is at around 24,400. Be aware of this level.
Looking for stocks with high potential, I found another one following Maanshan Iron&Steel I posted yesterday. However, as I still have not much confidence on the whole market, my focus will still be large-cap stocks which are highly defensive.
Above is the daily chart of New World Development (0017.HK). As we all know, the company's primary functionality is property development in both Hong Kong and PRC.
From its background, we could find great potential for high earnings because of the never-stop-surging property prices and the harmless-to-property policies imposed by the government.
Anyway, let's go back to technical analysis. I have drawn three trendlines in total: two down-trend and one up-trend.
The red down-trend line is a longer one, the price is still under this trend-line and I expect the BUY signal would be the breakout of this line.
The purple down-trend line is medium-term, NWD broke this line few days ago and showed a strong bullish trend here, together with the rising MACD.
The green up-trend line is a very short-term line but a strong one, as it has successfully supported the price three times.
Purple and green lines form a small pennant. This pennant has only been formed for around a month, so of course it is not that strong compared with the pennant for Maanshan Iron&Steel. However, breakout of this pennant would somehow give some power to the stock to break the red down-trend line as well.
Resistance is at 14.4, and if NWD breaks this level, we could buy and hold this stock.
Looking for stocks with high potential, I found another one following Maanshan Iron&Steel I posted yesterday. However, as I still have not much confidence on the whole market, my focus will still be large-cap stocks which are highly defensive.
Above is the daily chart of New World Development (0017.HK). As we all know, the company's primary functionality is property development in both Hong Kong and PRC.
From its background, we could find great potential for high earnings because of the never-stop-surging property prices and the harmless-to-property policies imposed by the government.
Anyway, let's go back to technical analysis. I have drawn three trendlines in total: two down-trend and one up-trend.
The red down-trend line is a longer one, the price is still under this trend-line and I expect the BUY signal would be the breakout of this line.
The purple down-trend line is medium-term, NWD broke this line few days ago and showed a strong bullish trend here, together with the rising MACD.
The green up-trend line is a very short-term line but a strong one, as it has successfully supported the price three times.
Purple and green lines form a small pennant. This pennant has only been formed for around a month, so of course it is not that strong compared with the pennant for Maanshan Iron&Steel. However, breakout of this pennant would somehow give some power to the stock to break the red down-trend line as well.
Resistance is at 14.4, and if NWD breaks this level, we could buy and hold this stock.
Wednesday, April 13, 2011
Good-buy stock (2011-04-13 Maanshan Irom&Steel analysis)
Hang Seng Index was down 1.34% yesterday, falling below 24,000. It looks like it is moving towards the support level I mentioned at around 23,700. If the index reaches this point, there would probably be a large buying-force and we can seize this opportunity to hold some stocks.
Yesterday I discovered a good stock that worths holding. Let's see.
The above is the daily chart of Maanshan Iron & Steel Co. Ltd. (0323.HK). Obviously, its major functionality is to manufacture and sell iron & steel products.
Despite of HSI's great slump, this stock was still able to gain a bit yesterday. It shows that the buying-power was definitely strong enough to resist the bearish power.
Technically, we can see that the stock price has just broken out the pennant. This pennant was formed in past 4 months and is definitely a strong one. Breaking-out of it means a lot to the stock.
Therefore, I am quite optimistic with 0323.HK. Regarding the fundamentals, China's infrastructure development is absolutely a major wealth generation for Maanshan Iron & Steel; but another source of income could probably be from Japan as they have to buy the two materials for rebuilding the cities collapsed during earthquakes.
Back to technical analysis, the next resistant level will be at 4.59, but I think it will break it and reach around 5.0. This is definitely a good-buy stock.
Yesterday I discovered a good stock that worths holding. Let's see.
The above is the daily chart of Maanshan Iron & Steel Co. Ltd. (0323.HK). Obviously, its major functionality is to manufacture and sell iron & steel products.
Despite of HSI's great slump, this stock was still able to gain a bit yesterday. It shows that the buying-power was definitely strong enough to resist the bearish power.
Technically, we can see that the stock price has just broken out the pennant. This pennant was formed in past 4 months and is definitely a strong one. Breaking-out of it means a lot to the stock.
Therefore, I am quite optimistic with 0323.HK. Regarding the fundamentals, China's infrastructure development is absolutely a major wealth generation for Maanshan Iron & Steel; but another source of income could probably be from Japan as they have to buy the two materials for rebuilding the cities collapsed during earthquakes.
Back to technical analysis, the next resistant level will be at 4.59, but I think it will break it and reach around 5.0. This is definitely a good-buy stock.
Tuesday, April 12, 2011
Within trading range (2011-04-12 GBP/USD analysis)
Hang Seng Index was down 0.38% yesterday, which was a slight drop due to the strong resistance I mentioned in previous post. European and US markets both did not change much, we can see that investors are standing back before having clear image about the world economy.
So today I'm going to talk a bit on forex.
Above is the daily chart of GBP/USD. I have identified a diverge triangle which the pounds have been following for four months.
Now, the price has reached the upper line, and it has great chance to fall back to the lower line, which is actually a pretty large range.
I don't expect GBP would break out the triangle without significant economic data supporting. Therefore, slumping would be more likely this time.
The support is provided by both the short-term and long-term trendlines, at around 1.593. This level is a very strong one so breakdown of triangle is not likely too.
Therefore, the British Pound is still in the trading range for the coming week. Especially if it drops to 1.593, we could LONG it to grab the profits from 1.593 to 1.65, which is pretty big profit.
So today I'm going to talk a bit on forex.
Above is the daily chart of GBP/USD. I have identified a diverge triangle which the pounds have been following for four months.
Now, the price has reached the upper line, and it has great chance to fall back to the lower line, which is actually a pretty large range.
I don't expect GBP would break out the triangle without significant economic data supporting. Therefore, slumping would be more likely this time.
The support is provided by both the short-term and long-term trendlines, at around 1.593. This level is a very strong one so breakdown of triangle is not likely too.
Therefore, the British Pound is still in the trading range for the coming week. Especially if it drops to 1.593, we could LONG it to grab the profits from 1.593 to 1.65, which is pretty big profit.
Monday, April 11, 2011
Big resistance (2011-04-11 HSI analysis)
With no bad news hurting the global markets, last week Hang Seng Index opened 23939 and closed high at 24396. This was a 2% great surge for the index.
However, at the end of last week, there was another earthquake in Japan which, though, did not impact the market much. Yesterday it was announced that China reported trade deficit, first in seven years, due to the great boost in imports. Such number can be treated as bad to the economy as it indicates lower GDP and output. So it is more likely that China markets would have a negative reaction.
How would Hong Kong market react?
Daily chart of HSI:
After the consecutive rise last week, the index broke the purple down-trend resistance, which was also identified last Monday.
In short-term, we could expect that there won't be a large slump, or it may further rise. On daily chart, 25,000 would be a significant resistance level as it is the previous high.
However, MACD is at high level, lowering the bullish momentum. There might be consolidation, but more hints can be found on weekly chart.
Weekly chart of HSI:
The purple line as well as the 25,000 resistance line is exactly the same ones as that on daily chart. But on weekly chart, we could easily find one more trend-line, shown in red.
This trend-line has actually been identified for over a month. Since around February 2011, the index had broken down this support line, and was not able to get back above it.
Now, HSI reaches this red line again. This time the line is acting as a resistance, stopping the index from climbing further.
Having supported the index for over five times, this trend-line could be treated as an extremely strong one. Therefore, I anticipate that HSI this week cannot break this line; hence, coming week would be a consolidation/dropping week.
However, at the end of last week, there was another earthquake in Japan which, though, did not impact the market much. Yesterday it was announced that China reported trade deficit, first in seven years, due to the great boost in imports. Such number can be treated as bad to the economy as it indicates lower GDP and output. So it is more likely that China markets would have a negative reaction.
How would Hong Kong market react?
Daily chart of HSI:
After the consecutive rise last week, the index broke the purple down-trend resistance, which was also identified last Monday.
In short-term, we could expect that there won't be a large slump, or it may further rise. On daily chart, 25,000 would be a significant resistance level as it is the previous high.
However, MACD is at high level, lowering the bullish momentum. There might be consolidation, but more hints can be found on weekly chart.
Weekly chart of HSI:
The purple line as well as the 25,000 resistance line is exactly the same ones as that on daily chart. But on weekly chart, we could easily find one more trend-line, shown in red.
This trend-line has actually been identified for over a month. Since around February 2011, the index had broken down this support line, and was not able to get back above it.
Now, HSI reaches this red line again. This time the line is acting as a resistance, stopping the index from climbing further.
Having supported the index for over five times, this trend-line could be treated as an extremely strong one. Therefore, I anticipate that HSI this week cannot break this line; hence, coming week would be a consolidation/dropping week.
Sunday, April 10, 2011
Important Economics Data this week (2011-04-10)
12-April (Tuesday)
16:30 UK CPI {Forecast: Unchange}
16:30 UK Retail Price Index
17:00 Germany ZEW Survey (Economic Sentiment)
21:00 Bank of Canada Rate Decision {Forecast: Unchange}
13-April (Wednesdsay)
16:30 UK Jobless Claims Change {Forecast: Less negative}
20:30 US Advance Retail Sales {Forecast: Decrease to 0.5% from 1.0%}
22:30 Canada Monetary Policy Report
15-April (Friday)
10:00 China CPI {Forecast: Increase to 5.2% from 4.9%}
10:00 China Real GDP {Forecast: Decrease to 9.4% from 9.8%}
20:30 US CPI {Forecast: Increase to 2.6% from 2.1%}
21:55 US U. of Michigan Confidence
source: http://www.dailyfx.com
16:30 UK CPI {Forecast: Unchange}
16:30 UK Retail Price Index
17:00 Germany ZEW Survey (Economic Sentiment)
21:00 Bank of Canada Rate Decision {Forecast: Unchange}
13-April (Wednesdsay)
16:30 UK Jobless Claims Change {Forecast: Less negative}
20:30 US Advance Retail Sales {Forecast: Decrease to 0.5% from 1.0%}
22:30 Canada Monetary Policy Report
15-April (Friday)
10:00 China CPI {Forecast: Increase to 5.2% from 4.9%}
10:00 China Real GDP {Forecast: Decrease to 9.4% from 9.8%}
20:30 US CPI {Forecast: Increase to 2.6% from 2.1%}
21:55 US U. of Michigan Confidence
source: http://www.dailyfx.com
Friday, April 8, 2011
How china makret goes (2011-04-08 SSEC analysis)
HSI consolidated a bit yesterday, showing a lack of buying power which could push it to higher level. Nevertheless, the index could remain above the resistance line, it means that the breakout confirms.
Rather than looking at Hong Kong market itself, let's see how the China market is going.
Daily chart of SSEC:
Since Jan 2011, it has been rising along the red up-trend line. The index tried two times to break the level of around 3,000, but obviously it failed.
Currently, it reaches this resistance again. Its time for SSEC to have its third trial.
Looking at the chart soley, I am not too optimistic with it. Firstly, it is clear that this level has extremely strong resistance. Strong buying power would be needed for a breakout.
Secondly, MACD and its EMA are having whipsaw. Also, they are at almost the highest level in the past few months, suggesting that there is not much bullish momentum for SSEC.
Therefore, I expect it to drop a bit. The red line could still act well to support SSEC at around 2960.
3000 remains a very strong resistance. It might take some time to break it, when the red trend line finally meets 3000 level.
If the index breaks upwards, 3122 is the next resistance analyzed using fibonacci projection.
Good luck everyone
Rather than looking at Hong Kong market itself, let's see how the China market is going.
Daily chart of SSEC:
Since Jan 2011, it has been rising along the red up-trend line. The index tried two times to break the level of around 3,000, but obviously it failed.
Currently, it reaches this resistance again. Its time for SSEC to have its third trial.
Looking at the chart soley, I am not too optimistic with it. Firstly, it is clear that this level has extremely strong resistance. Strong buying power would be needed for a breakout.
Secondly, MACD and its EMA are having whipsaw. Also, they are at almost the highest level in the past few months, suggesting that there is not much bullish momentum for SSEC.
Therefore, I expect it to drop a bit. The red line could still act well to support SSEC at around 2960.
3000 remains a very strong resistance. It might take some time to break it, when the red trend line finally meets 3000 level.
If the index breaks upwards, 3122 is the next resistance analyzed using fibonacci projection.
Good luck everyone
Thursday, April 7, 2011
High vol coming (2011-04-07 EUR analysis)
HSI made another 0.56% surge yesterday, it is most likely that it could be able to stay above the resistance line. However, I still could not think of what is supporting the market when there is not much good news.
Today I'm going to take about forex.
Above is the daily chart of EUR/USD. Instead of using 4-hour as usual, I post daily chart this time as I think that there is potential position trade that could last for weeks.
Starting from Jan 2011, price of Euros keeps on snowballing, along the red flag. It is almost time for the currency to reach the end of the flag.
In fact, some of you might see that the price actually breaks the previous high, which is a very strong resistance level. However, the price is still under the limitation of the flag, and I believe that this flag would have much larger impact on EUR.
We should not simply buy Euro because of its breakout of the previous high. Volatility would inevitably jump here, either going upwards or falling.
MACD is moving flat for a few months, and RSI is currently at high level. Rising power of EUR would be weaker now. Therefore, I am not optimistic on the price.
Prepare for the high vol.
Today I'm going to take about forex.
Above is the daily chart of EUR/USD. Instead of using 4-hour as usual, I post daily chart this time as I think that there is potential position trade that could last for weeks.
Starting from Jan 2011, price of Euros keeps on snowballing, along the red flag. It is almost time for the currency to reach the end of the flag.
In fact, some of you might see that the price actually breaks the previous high, which is a very strong resistance level. However, the price is still under the limitation of the flag, and I believe that this flag would have much larger impact on EUR.
We should not simply buy Euro because of its breakout of the previous high. Volatility would inevitably jump here, either going upwards or falling.
MACD is moving flat for a few months, and RSI is currently at high level. Rising power of EUR would be weaker now. Therefore, I am not optimistic on the price.
Prepare for the high vol.
Wednesday, April 6, 2011
When to start cropping? (2011-04-06 1288.HK analysis)
Hang Seng Index surged 1.46% on Monday, breaking the red resistance I mentioned in previous post. Now we would have to see whether the index could stay still above the line or not.
Today I am going to talk about 1288.HK Agricultural Bank of China (ABC). It is currently facing a big difficulty.
Daily chart of 1288.HK:
Agricultural Bank of China had its IPO only in July last year, and had surged over 30% in a few months. However, due to the poor market atmosphere, it dropped over 50% since the high.
In past two months, ABC was gaining along the green up-trend line. It did test the line for a few times but the up-trend line appeared to be strong enough to keep its bullish trend.
We could see that in last three trading days, ABC had a crazy rise and finally, it got back to its previous high.
This is the difficulty ABC facing now; the horizontal line is actually very strong. Besides the fact that it is the previous high, this level is also the 261.8%-fibs level, using the starting of the bullish trend as 0% and the first crest it reached. Both contribute to the selling power and hence ABC has high chance to retreat.
MACD almost reaches it all-time high and should start to fade a bit. Volume is not that high enough to break such a strong resistant too.
I expect ABC would fall, and start to consolidate between the green up-trend line and the horizontal line. There will be a support at around 4.3.
Then it might break the previous high and record a new high. The resistance above it would be at around 4.73 predicted using fibs retracement shown in red. If ABC breaks 4.51, it would be time to buy.
Today I am going to talk about 1288.HK Agricultural Bank of China (ABC). It is currently facing a big difficulty.
Daily chart of 1288.HK:
Agricultural Bank of China had its IPO only in July last year, and had surged over 30% in a few months. However, due to the poor market atmosphere, it dropped over 50% since the high.
In past two months, ABC was gaining along the green up-trend line. It did test the line for a few times but the up-trend line appeared to be strong enough to keep its bullish trend.
We could see that in last three trading days, ABC had a crazy rise and finally, it got back to its previous high.
This is the difficulty ABC facing now; the horizontal line is actually very strong. Besides the fact that it is the previous high, this level is also the 261.8%-fibs level, using the starting of the bullish trend as 0% and the first crest it reached. Both contribute to the selling power and hence ABC has high chance to retreat.
MACD almost reaches it all-time high and should start to fade a bit. Volume is not that high enough to break such a strong resistant too.
I expect ABC would fall, and start to consolidate between the green up-trend line and the horizontal line. There will be a support at around 4.3.
Then it might break the previous high and record a new high. The resistance above it would be at around 4.73 predicted using fibs retracement shown in red. If ABC breaks 4.51, it would be time to buy.
Monday, April 4, 2011
Could it break? (2011-04-04 HSI analysis)
The market was doing quite good last week. HSI reached the resistance again. This week we have to see whether it could break it or it would turn its direction.
Daily chart of HSI:
Obviously HSI touched the red down-trend line. There is a very strong selling-power here.
One thing to mention, 10-day SMA is touching 20-day SMA from below. We still could not confirm whether it is a real cross or just a fake one (whipsaw?). Time will tell.
MACD is at level around 0, and is increasing, showing that the momentum for rise would be quite strong.
Nevertheless, if the index could not break the resistance, it could probably fall to around 22,400.
Weekly chart of HSI:
Weekly chart tells the same story. HSI reaches the red resistance.
MACD and its EMA are touching each other, having the probability of bullish cross.
I have added a fibonacci retracement at recent high/low, and found that on weekly chart, 38.2%-level seems to be quite strong. Therefore, I expect that there would be a support at around 23,200.
So basically, all our investment ideas would depend on whether HSI could break the resistance on both daily and weekly charts.
Daily chart of HSI:
Obviously HSI touched the red down-trend line. There is a very strong selling-power here.
One thing to mention, 10-day SMA is touching 20-day SMA from below. We still could not confirm whether it is a real cross or just a fake one (whipsaw?). Time will tell.
MACD is at level around 0, and is increasing, showing that the momentum for rise would be quite strong.
Nevertheless, if the index could not break the resistance, it could probably fall to around 22,400.
Weekly chart of HSI:
Weekly chart tells the same story. HSI reaches the red resistance.
MACD and its EMA are touching each other, having the probability of bullish cross.
I have added a fibonacci retracement at recent high/low, and found that on weekly chart, 38.2%-level seems to be quite strong. Therefore, I expect that there would be a support at around 23,200.
So basically, all our investment ideas would depend on whether HSI could break the resistance on both daily and weekly charts.
Sunday, April 3, 2011
Important Economic Data this week (2011-04-03)
It would be FX fluctuating week.
5-April (Tuesday)
09:30 Australia Trade Balance
12:30 Reserve Bank of Australia Rate Decision {Unchange; but some experts predict an increase due to the unexpected high inflation rate}
6-April (Wednesday)
02:00 Minutes from March15 FOMC Meeting
09:30 Australia Employment Change
17:00 Euro-Zone GDP {Forecast: Unchange}
7-April (Thursday)
19:00 UK BOE Asset Purchase Target
19:00 Bank of England Rate Decision {Forecast: Unchange}
19:45 European Central Bank Rate Decision {Forecast: Increase to 1.25% from 1.00%}
8-April (Friday)
19:00 Canada Unemployment rate
source: http://www.dailyfx.com
5-April (Tuesday)
09:30 Australia Trade Balance
12:30 Reserve Bank of Australia Rate Decision {Unchange; but some experts predict an increase due to the unexpected high inflation rate}
6-April (Wednesday)
02:00 Minutes from March15 FOMC Meeting
09:30 Australia Employment Change
17:00 Euro-Zone GDP {Forecast: Unchange}
7-April (Thursday)
19:00 UK BOE Asset Purchase Target
19:00 Bank of England Rate Decision {Forecast: Unchange}
19:45 European Central Bank Rate Decision {Forecast: Increase to 1.25% from 1.00%}
8-April (Friday)
19:00 Canada Unemployment rate
source: http://www.dailyfx.com
Friday, April 1, 2011
Simple but useful strategy (2011-04-01 USDJPY analysis)
You can see in the above the 4-hour chart of Japanese Yen. Recently, the price has been climbing, which means a weakening of the Yen.
Obviously, USD/JPY has almost reached its previous high, and there would be an extremely strong resistance there.
On the other hand, the red up-trend line provides an increasing support to the rate. This pushes Yen to lower and lower levels.
Now the rate is at the end. It's time for it to choose whether to break upwards or downwards. Volatility will undeniably jump.
Looking at the current situation, I would expect a further weakening of Japanese Yen; which means a boost in USD/JPY and the breakout.
The main reason is that, although there is speculation about Japanese companies buying Yen, the fundamental is not really good. The government and companies have to spend a lot on fixing the plants and buildings and houses after the earthquake and tsunami. There might be worries about whether they can, or how long they can, keep a good financial status. Such thoughts would help weaken Yen.
Anyway, I myself trust technical analysis more. What we have to do now is to wait, and see how it would go after the end of wedge. It's simple: if it breaks upwards, we buy (USD/JPY); otherwise, we sell.
Happy Fool's Day :D
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