An interesting stock (2011-09-29 Esprit analysis)

Growing concerns in Europe debt crisis continued to well drag the global market indexes down. US and European markets were down over 1% yesterday, and today's Hong Kong market could hardly rise.

While the market is not clear at all, today I am going to post the stock that you should be extremely familiar with these days, which had dropped almost 50% in just 3 single trading days.
















Above chart is the daily chart of Esprit holdings (0330.HK). I guess you all know the company focuses on retail industry and sells clothes.

After end of 2007, the stock price has been sliding downward gradually, due to investors' shrinking expectations on its revenues, especially after financial crisis. Profits were expected to plunge a lot.

So starting from June 2011, the price moved along the red downward trend line as shown in the chart, and slowly dropped.

Serious slump happened after announcement of its Final results, which their profits were down greatly. Soon after this announcement, the price fell below 10 from 18 in just three days.

Now, it looks like it has bottomed at least these few days, and may rebound. But there are still quite a lot resistances.

For example, the red line provides quite strong resistance at around 12. The 10-day SMA has just successfully resisted the price from spiking.

On the other hand, the previous low at around 7.6 would become next support, hopefully the price doesn't drop lower than that.

MACD and its EMA touch each other, so we still have to wait and see whether there will be a bullish cross or not. If yes, then it's quite likely the price would go higher than 12 as well.

Levels for Gold (2011-09-28 XAU analysis)

Above is the daily chart of Gold (XAU=). It is really one of the markets that we would have to pay attention on recently.

After a long surge to over 1,900, the gold price plunged hard in previous few days following the OT measurement.

In fact, when we looked back in late August, there was a MACD divergence. This divergence has already warned us about possibility that the crazy strong buying-force would come to an end and the price of gold would slump.

After the great drop to 1,534, I drew a fibonacci retracement using this level and the high at 1,920. We can see that there is strong resistant at 38.2% level and strong support at 23.6% level.

So this fibonacci retracement does work on letting us predict the levels. If 38.2% breaks, then 50% which is around 1,720 would be the next resistant.

On the other hand, if 23.6% breaks, then the previous low at 1,534 would be the next support.

If we check the stochastic slow, we can find that these few days it has shown a divergence too. The price of Gold dropped greatly but stochastic actually rose a bit. So this divergence might tell us that Gold would at least rebound, or even head to the previous high again. I would generally have a more bullish view on Gold.

Trend changed (2011-09-27 EUR analysis)

Above is the 4-hour chart of EUR/USD. After late August, Euro has been undergoing a downward trend and reaching lower levels.

The red line represents the downward trend, which has successfully resisted the currency a few times.

Currently, EUR climbs to the red line again. We have to keep an eye on whether it would break out, and I think the chance is quite high.

MACD and Stochastic slow both shows a divergence recently. This shows that the price should be having a trend reversal and that EUR would start moving in bullish trend.

EUR could not break down after two trials, and that means the buying force of Euros at that level is quite strong.

So I think Euro would break out, support levels are predicted using fibonacci retracement: 1.361, 1.381, 1.354.

How would it go? (2011-09-26 HSI analysis)

Finally I have settled down at Warwick, being ready to start a year full of Mathematics. Look forward to learning more!

Last week was a disaster for long-only investors, but might be a great week for those who was in short positions. Operation Twist proposed by the Fed and concerns resulted in plunges in world's stock markets.

Hang Seng Index broke 18,000 and reached as low as 17,373 last Friday. After checking the daily chart of HSI, it appears to me that we can hardly tell anything from daily chart.

So I decided to move on to weekly chart.














As mentioned before, a bearish flag was identified clearly on this chart. In the middle of the bearish trend, the red flag indicates a further bearish trend.

As usual, purple pitchfork is the main tool here. We can see that the index broke the lowest line of the fork, meaning a even steeper downward trend.

Using the high in late 2010 and the low after financial crisis, we can see that HSI just broke the 50% retracement level too. Next retracement level is at around 16,100.

So this week depends on whether HSI would continue dropping or get back into the pitchfork.

If HSI drops again, 16,100 will be the next support. Pitchfork becomes a resistant at around 18,200.

If HSI bounces, it is still under a bearish trend, but will slump more slowly. 19,500 will be a major resistant level.

Important Economic Data this week (2011-09-25)

26-Sept (Monday)
22:00 US New Home Sales {Forecast: Slight drop}

27-Sept (Tuesday)
22:00 US Consumer Confidence {Forecast: Rise}

28-Sept (Wednesday)
20:30 US Durable Goods Orders {Forecast: Drop to negative}

29-Sept (Thursday)
Germany Consumer Price Index (YoY) {Forecast: Unchanged}
20:30 US GDP {Forecast: Slight increase}
20:30 US Personal Consumption {Forecast: Unchanged}

30-Sept (Friday)
20:30 Canada GDP (YoY) {Forecast: Slight increase}
21:55 US U. of Michigan Confidence {Forecast: Unchanged}

Resisted again (2011-09-23 VIX analysis)

Global bear market as mentioned on Bloomberg news... 18200 breaks and the next support would be 15900. Looks nothing too serious happened these days, the recent plunges were just driven by Twist Operation in US and again concerns and worries. Is it really news that can bring the indexes down to record lows in like 2 years?
















Above is the daily chart of Volatility Index (.VIX). I made it to a longer period in order to see a general trend.

Actually there was no specific trends. We can see that VIX repeated the process of moving lower along a trend line, breaking out to a high level, and undergoing another downwards trend.

Breakouts are indeed predictable. We can see that MACD was always showing a divergence pattern when VIX was moving downwards.

This time it looks like there is a small divergence in these few days. But the difference is this time the index is spiking but MACD is shrinking.

Though there was a breakout of the green wedge, I somehow predict a slump back into this wedge and the index would reach the support at around 30.

Upside risk is still at 50, which is an extremely strong level resisting the index. It really depends on whether there is any news that is horrible enough for most investors to sell their stocks, but I still don't foresee one in very near future.

A short lesson (2011-09-21 CLP Holdings analysis)

Today let's take a short lesson on Technical.
















Charts speak.

Be aware of the current MACD divergence, which might indicate that CLP is not going to break the lower red up-trend line. But anyway the level can go up because of price surge.

Good luck.