TRADE – LSE:KAZ

– Price has managed to stay above the descending trendline and now acting as a support level.
– The higher high now invalids the symmetrical triangle (usually a continuation pattern) and suggests further gains
– The outside day suggests near-term gains
– Ichimoku chart is providing strong bullish signals with potential support around 9.2

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TRADE – LSE:TALV

Here’s a thorough analysis of TALV (Talvivaara Mining Company Ltd) which is a Mining Stock I recently suggested to watch. Overall I think the longer-term bullish confluences look strong and the bearish confluences all point towards a retracement as opposed to continuation of the bearish trend.

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AUDUSD – Re-Entry

I’m currently long on AUDUSD and questioning whether to close my position after a day of consolidating.
– Overall I’m still bullish as I cannot see any concerning bearish divergences forming on RSI
– However RSI does seem to have formed cycle peaks on several timeframes so it is making me consider a pullback
– If a pullback is to occur I have included potential stalling points where I will consider ‘buying dips’
– The resistance area is clearly around 1.038-39 but if broken we may possibly retest the high around 1.07              
So I’m favouring buying any dips, or resetting my entry to enter above the 1.039 area with my stop beneath the congestion zone – whichever happens first! 
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“Trade what you see, not what you think…”

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TRADE: LSE:CEY – Centamin Egypt Ltd

– Centamin Egypt Ltd (CEY) is a Gold Mining Company within an established downtrend
– Even though both Gold and CEY are within a downtrend, KEY is the weakest performer as the ratio line between the two is still descending.
– CEY is resting on the historical support/resistance level around 80 – I’ll be shorting on the assumption that if this level breaks it could be quite significant.
– The target becomes a little tricky because not much price action has been seen beneath the 80 level until the 55 mark (which is clearer to see on the volue histogram on the 2nd pic) so initially I’ll target 55 and assess how the trade develops if it ever triggers.
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“Trade what you see, not what you think…”

Follow @cLeverEdge

FTSE100 – MARKET BREADTH

I had been watching the divergences between the small-cap stocks and FTSE100 for the majority of last year, so when the losses did come it didn’t come as too much of a surprise.
Without trying to sound too bullish too soon into the year, we now see small-cap and large-cap stocks converging again, and with the FTSE closing above the 200-day MA for the first time since August 2011 its certainly not a bad start to the year.
We may we be due a pullback but I’ll be keeping an eye on my bullish stock list for Q1 of 2012 and hope to catch some larger moves.
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“Trade what you see, not what you think…”

Follow @cLeverEdge

BRENT OIL – ELLIOTT WAVE COUNT

Today’s close has now produced a higher high and a higher low which increases the chance of a bullish move unfolding.

Wave (iii)
Today’s close above b of (ii) makes me think we’ve seen the end of the Double Zig-Zag correction from the 127 high
If so, a likely target for wave (iii) will be back near the 127 high as this is also a 161.8% projection from waves (i) and (iii)
Wave (iv)
Wave (ii) retracement was a simple correction (ABC/Zig-Zag) so wave (iv) is likely to be complex (triangle, flat, expanded flat or combinations of)
However wave (ii) was quite deep at 76.8% so wave (iv) could be quite shallow (23.8%) – therefor I’m favouring a complex flat stalling around 121
Wave (v)
61.8% projection from (iv) is around 137
Please note I will need to do cycle analysis to anticipate timing as this EW is purely looking at the projection and retracement ratios as opposed to the timing of these events.
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“Trade what you see, not what you think…”

Follow @cLeverEdge

LSE:AFR – Breakaway Gap Confirmed

Quite a few bullish candles have formed across the FTSE today on high volume which confirms the Breakaway Gap on Afren.
This leaves 2 options on how to handle this stock
– Enter live at market tomorrow with a stop beneath today’s low, or beneath the gap (in case the gap may still be filled)
– Wait for a retracement towards the gap to achieve a better reward/risk – however your order may not get filled.
The thing to remember about breakaway gaps is they tend to mark the beginning of a large trend, so you could even use a simple buy and hold strategy with a wider stop. Seeing as mining stocks have a large impact on the FTSE then it also provides an insight into how the FTSE (and correlated markets such as US Indices, AUDUSD) may behave. I’ve also included a couple of other mining stocks below that may be of interest.

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GOLD – Point & Figure

– Gold has retraced to its intermediate P&F trendline.
– This leaves potential for a bullish retracement so I’ll be monitoring this chart to see if a bottoming pattern forms.
– A close below 1550 is bearish.

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ALOCOA vs ALUMINIUM

With Alcoa being a leading producer of Aluminium it shouldn’t come as too much of a surprise that the company has a well formed relationship with Aluminium prices.
– Last two primary tops of Alcoa provided a 1-3 month lead for Aluminium top
– Aluminium bottomed 1 month before Alcoa to provide a buy signal
– Both markets are within a downtrend so look out for either to provide the lead for a buy signal in 2012
– Relative strength should provide a clue here if it breaks its current downtrend line
– They currently correlate very closely (0.8 out of 1) so expect the correlation to drop once either Alcoa or Aluminium take the lead (historically Aluminium has bottom first)

FTSE SECTOR – GENERAL INDUSTRIALS (NMX7570)

– Recently broke its Relative Strength descending trendline against the FTSE
– Both markets are currently consolidating, but General Industrials is potentially a market to watch for longs next year
– I’m looking for a close above 2750 to confirm a bullish move within this sector
– Generally correlates with FTSE
– Stocks to monitor: REX, RPC, SMDS