At VectorVest we favour undervalued shares.

[Join David for a live 60 minute webinar at 6.30pm BST today 27th June – click here]

It’s been quite a day in financial markets to say the least. The process of exiting the EU will be protracted and very difficult. Many other countries could be tempted to follow the UK and it’s likely that the EU will do anything in its power to survive. Clear and strong leadership will be required and required very soon. Both the ruling party and the main opposition party are presently engaged in civil war. They need to pull themselves towards themselves soon.

What we do know, however, is that disentangling Britain’s 43 years of EU membership will not be an easy process.  The UK will remain part of the EU until it invokes Article 50 of the Lisbon Treaty, which has a two-year deadline to work out an exit.

Although the impact of Britain leaving the EU will create huge short-term uncertainty across global markets, this is not the start of an Armageddon-style scenario.  The world as we know it will not stop. There will be key buying opportunities for investors who will use this volatility created by markets overreacting as a time to go bargain-hunting

Present and mindful investors will be seeking high quality equities, amongst other assets, that have become cheaper so that they might top up their portfolios and/or take advantage of lower entry points, which means greater potential returns. These shares will probably be found within defensive sectors and can be easily found using the conservative trading searches which are a part of the VectorVest program.

At VectorVest we have been running a workshop called “Worry Free Investing”.

In this brand-new workshop I show the delegates that the key to long-term success in the Share Market is to hold shares with outstanding financial performance, shares with consistent and predictable earnings growth.

I then help the delegates take the first and most important step to worry-free investing by showing how to find those safe, high quality shares to create a worry-free portfolio.

At the workshop the delegates will also learn how to set up, run and protect a portfolio able to withstand the worst of bear markets and make the most of bull markets.

[Join David for a live 60 minute webinar at 6.30pm BST today 27th June – click here]

Each day VectorVest calculates a value for every share on the LSE and AIM. Just putting this one measurement to work works wonders for your portfolio. In Unisearch I tested for shares that are trading below their value and sorted those shares by VST. VST is the VectorVest master indicator which combines Value, Safety of earnings and Trend. I started the search on the 1st January 2015 and that’s around 18 months ago. The overall market was flat over that period while the top 10 shares in the search are up over 35% to the close just before the vote. That’s why I only invest in shares that are trading below their respective VectorVest valuations. I sleep much easier. Even with Friday’s selloff this search has greatly outperformed the overall market.

As well as calculating the value of a share, VectorVest assigns a number, on a scale between 0 and 2 which summarizes the safety and predictability of the financial performance. Above 1 means the share has a Relative Safety (RS) which is above average for the market. Above a figure of 1.3 the RS is described as excellent.

If I add a line, RS greater than 1, to the above Unisearch, I can eliminate all of the shares where the financial position has been hit and miss. This reduces the performance a little but still the portfolio has outperformed the market by miles over the past 18 months.

I have discussed these scans with Zak Mir on Tip TV and the recording is in the previous article on this blog.

On Thursday prior to the results of the Euro vote my Copper position reached the target from the falling wedge that I described a few weeks ago. There is also a video of the setup on the blog, again with Zak Mir. Although the falling wedge has made its target I am still optimistic that we are close to a major turning point in the commodity cycle. In the carnage of Friday the copper market found strong support at a trendline which defined the tops of the falling wedge pattern that I have been discussing here for the last month.

Last weekend I pointed out “Lost Motion” trades in BATS, Reckitt Bench, Admiral Group and Imperial Brands. All of the trades moved upwards during the week with BATS and Admiral closing well up for the week. I took profits in BATS and Admiral at the last old high. I enjoy the “Lost Motion” swing trades as if they work the move is fast and strong. I will detail this trade in the webcast on Monday 27th June as the setup I feel will be very applicable to the volatility which is certainly ahead of us. The chart of BATS and the Lost Motion setup is shown below.

david

As the market rallied last week, prior to the referendum result, I was rather glum because I had been stopped out of many of the shares in my unleveraged account during the downturn of the previous week. That emotion changed quickly during the early hours of Friday morning. I have the four positions that I spoke about last week. These are JD Sports, Keller, Trifast and Gleeson. Keller remains on a buy recommendation.

The open on Monday will be critical in the light of the rating agencies statement.

Please protect capital at all costs.

David Paul

June 25th 2016

[Join David for a live 60 minute webinar at 6.30pm BST today 27th June  – click here]

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Markets don’t like surprises…

For most of us, the result of last week’s UK referendum vote was a surprise. Whether you voted in or out, most were still surprised at what happened, no more so than the markets. The GBP/USD was trading at $1.50 on Thursday but had traded as low as 1.3230 by Friday for an almost 1800 pip drop.

Although the currencies steadied somewhat later in the day, it was still a huge move all over. As more stories have been released over the weekend, traders are having to grasp the enormity of the event and what that could still mean. For example, many traders would have been like deer’s in the headlights on Friday, but as the new week starts, people start to develop a plan for what they are going to do and so with the negative sentiment still very much at a high, we should expect more selling to come in on the pound.

Let’s not forget the Euro either. The result of the UK referendum has sent shock waves all over Europe and fears will start to grow about other EU nation’s demanding their own referendum too. No one likes uncertainty and so as the markets start pricing in what could happen to the Eurozone, we could see more selling on EUR/USD too.

For the Euro, looking at the monthly chart, we have the very real possibility of a retest of the trendline on the chart (green line) which actually started in 2001. That line is currently down in the 1.0650 zone so I will be watching for further breaks below Friday’s lows as confirmation that the next phase down is beginning.  Unless the Euro was to somehow break last week’s highs (a very low odds event), this looks like a one sided market where bounces are seen as just that.

I appreciate that there will be many out there who will feel a lot of uncertainty about what the future is going to bring so I like to remind myself of the following; we can be pretty sure that life always moves on, society progresses, standards of living will continue to rise and I’m pretty confident that we will look back on this in 10 years time as a volatile period, but that we all came through it. I always believe in being an optimist for the long run no matter what happens in the short run.

simoneuro-1

As traders, these are incredible times with incredible opportunities…

Have a great week

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The Midas Touch Technique

The Midas Touch Technique

The Midas Touch technique of timing share transactions and its ability to find and stay with big trends is impressing me more and more. The technique was first used by VectorVest to trade the USA Gold share index and thus the name.

The technique makes uses of a 10 day average and a 65 day average of the VectorVest stop loss. The VectorVest stop loss is loosely based on a 65 day average of the share price and thus the technique applies double smoothing to the price action. In addition the momentum of the move is judged by the 40 day average of the VectorVest Relative Timing metric (RT). RT on its own is a tad noisy and the 40 day average of the RT ignores this noise and finds strong momentum moves.

The Midas Touch template is a standard feature on VectorVest and it can be applied to any share chart with a single click.

I use the Midas Touch very simply and visually. For a share purchase the 10 day average of the stop should be above the 65 day average of the stop and the RT (40) should be above 1. Both criteria need to fire for a share purchase. Ideally I want to get onboard early in the move.

To exit the 10 day average should fall through the 65 OR the RT (40) should fall below 1. Only a single criteria is needed to exit.

To initiate a short position the 10 day average of the stop should cross down below the 65 and the RT (40) should be below 1. Again only a single criteria is needed to cover the short position. Either the 10 crosses up through the 65 or the RT (40) moves above 1.

The technique is simple and straightforward and very profitable.

Divergences between the price as measured by the 10 and 65 averages and the momentum as measured by the RT (40) can add to the reliability of the technique. If the 10/65 are falling but the RT (40) is making a rising bottom then this divergence is known as bullish normal divergence. Bullish normal divergence which precedes a BUY signal from the Midas Touch increases the hit rate of the technique. The chart of Johnson Matthey below shows the bullish divergence prior to a BUY signal.

david

Similarly the Midas Touch chart of Royal Dutch Shell also shows this type of divergence. When prices were falling into the lows of February 2016 the RT (40) could not follow and charted a double bottom. This preceded a buy signal when the 10/65 crossed and the RT (40) moved above 1 at the start of March 2016. In my experience, in all time frames, a normal divergence preceding a signal adds to the validity of the setup. My experience of this runs from 5 minute intraday charts to monthly charts over decades.

Similarly if the 10/65 are rising but the RT (40) is making a lower top then this is known a bearish normal divergence. This is an important advance warning of a turn and many may wish to lighten long positions when the divergence is spotted. A sell signal preceded by bearish normal divergence makes for a high probability shorting opportunity.

On the LSE the tide has turned strongly and the Primary Wave has been down since June 10th. During the week past the underlying trend has turned down as well, although that still hasn’t been confirmed by price action. The DEW technique gave a Sell signal midweek.

As we move into the referendum week I don’t see the volatility easing in any way. During the past few days I have exited by poorer performers as they hit their respective stop loss figures. I remain in positions in JD Sports, Gleeson, Trifast and Keller. Trifast seems to have broken upwards on good results and with some positive news from the market should do well from here.

It’s been a difficult year to say the least. I have been through much worse and it will turn when we least suspect it. The key is protecting capital in these stagnant periods.

If the market should turn upwards there are potential Lost Motion trades (please see my last few entries in this blog) galore. These setups are based on purchasing shares at strong support levels, which we are betting, will hold. I always like to observe that the Primary Wave has turned before getting on board and we are quite away from that as I write after the close on Friday 17th 2016.

There are Lost Motion trades setting up on Reckitt Benck, Imperial Brands, Admiral Group and BATS. These are for the brave. If you wish to be a short term swing trader over a few days then being brave is a pre requisite for success.

The falling wedge on the Copper price that I wrote about last week is still in play and a potential bottom is still being hammered out. In the past week we had a strong move to the trendline defining the falling tops of the wedge. The shorts stepped in at this point and the metal fell hard. This type of churn at a major bottom is common and I remain optimistic.

David Paul

June 17th 2016

Try out the Midas Touch Technique – start your VectorVest 5 week trial for only £5.95 – click here

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A growing library of free trading webinar recordings

When it comes to trading it’s all about what’s going to happen next, right?

Well yes and no.  Certainly predicting the future would be handy, but in reality the most successful traders just get on with whatever information they have to hand – which is the past price behaviour.

Safe in the knowedge that prices often move in cycles, the jobbing trader can make money identifying these cycles and then entering and exiting the trades to make some profit.

In the same way, a knowledge of what has gone before is very valuable.  This is why we are working to make the webinar library or recordings as easy as possible for you to use.

By reviewing the recordings, you’ll not only be able to review the teaching principles that stand the test of time, but also you’ll be able to understand how these trader speakers were viewing the market on a particular day – a snapshot if you like.  With the benefit of hindsight, you’ll be able to compare the signals to today’s markets and hopefully this kind of ‘backtesting’ will hone your trading skills further.

Search our library of free webinar recordings – click here

Simon Campbell

London Investment Week

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An exciting line-up of speakers for June Round-the-Clock-Trader – part 1

This month I’ve tried hard to pull together an exciting line-up for the 12 hour trading education that we offer at the Round-the-Clock-Trader event.  It’s always quite difficult to ensure everyone can fit into certain time slots – especially when speakers are often geographically spread across the globe!

Starting our event this month is Zaheer Anwari.  He’s a champion of longer trem trend trading as the key to building wealth – and he explains the strategies he uses to uncover these stocks that fulfill his objectives.  He’ll be start at 9am BST.

Following Zaheer, we have Francis Hunt a.k.a The Market Sniper.  Hold onto your seats as Francis takes you on a fast paced review of the global markets, and uses this backdrop to highlight some of the macro economic trends that will produce trading opportunities for the astute investor.

3 Steps: From Inconsistent to Consistent Profits is the title of Rishi Patel’s 11am talk – he’ll be showcasing the unique indicators and strategies that they use at Master the Markets to capture regular returns from the markets.

Why attend Round-the-Clock-Trader?

Well, for a start it’s free.  Secondly you don’t need to travel to a hotel or conference centre to learn – and that is all before you start to add up the value of having live direct access to some of the wisest heads in the business for a day.

When I started offering private investor education with my sister in the late 1990’s – it took weeks to plan a workshop – and the most recent data we had available during the workshop was the morning copy of the FT!  Nowadays it all moves so fast and we all have access to the technology to capitalise on the information we hear almost immediately.

Round-the-Clock-Trader isn’t an event that will give you any specific advice of course, it is there to educate you – and we hope that the rapid fire style of multiple speakers discussing various aspects of trading serves to provide you with a rounded view of the markets, and the opportunities theirin to profit from the them.

So whether you are just starting out and looking for some practical tips on what to trade, how to choose a broker and tools, or an experienced day trader with an ear for the latest hot tip – you’ll enjoy listening live to the experts on offer.

What timeframes should I be trading?

This is above all else, the most frequently asked question put to speakers at the RTCT events.  It’s a topic of much discussion and the answer greatly depends on personal approach to risk and objectives.  Being such a key topic I’m delighted to welcome Paul Wallace (@fxtraderpaul) to highlight some do’s and don’ts this month.  FXTraderPaul is a financial trader and performance coach with more than 23 years’ experience working in competitive, results-driven, performance environments. Working with individuals operating in challenging zero-sum environments, he helps create a ‘performance mindset’ to promote success.  He’ll be talking from 12pm BST.

Next week we’ll take a more in depth look at the afternoon and evening schedules.

However, the full list of speakers for 23rd June is published here if you can’t wait until next week!  Click here.

Simon Campbell

London Investment Week

 

 

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Adapting to the trading environment…

As traders, we need to be able to adapt to what the market is doing. For example, being a breakout trader in a sideways consolidating environment is not likely to yield too much profit. We have to be able to read what the market is doing in order to apply the right trading dynamic which is most suited to it.

Let’s take rugby as an example. Last weekend, England were playing Australia and in the first 30 minutes it was evident that our game plan wasn’t working. The Australians were running at us fast and breaking our defensive lines. Many coaches would wait until at least half time before trying to make any tactical changes but the England manager Eddie Jones spotted the problem and made a bold move by bringing an England player off and replacing him with the view to adapting to what was happening on the field early.

This swift action shored up the England defence and tactically, England could now play in a way that allowed them to get back into the game and actually secure the biggest score they’ve ever had in Australia.

It’s exactly the same with trading. We also have to play ‘heads up rugby’. We need to adapt to what the market is doing and employ the right strategy at the right time. This is why multiple timeframe analysis should be part of every trader’s work. Using a top down approach that allows us to see the bigger picture. If we just use a singular approach, we don’t always see the woods for the trees.

That England rugby manager did indeed spot the bigger picture of what was happening in the game. He made changes early, adapted his technical approach and as a result the game was won. Trading is no different, heads up trading wins the game….

Over to the markets, The AUD/NZD currency pair has sold off strongly since late April and looking at the weekly and monthly timeframe, it has broken last Octobers low. Next technical support on that timeframe is the April 2015 low which is down around 1.0050 which is 400 pips lower than where price is now. Although this is larger timeframe analysis, the stage is set over the coming months for price to attempt a run at those lows…

charlie

Have a great week

Charlie Burton

Ezeetrader

Claim 2 free days inside the Ezeetrader live trading with Charlie & Kym – click here

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Bo Yoder S&P update

The S&P 500, (NYSE:SPY) is coming back to test support, and this will be the acid test of bullish resolve.  Our models show that the odds are likely that there will be one last failed rally as this bounce off support loses energy and stalls…We will be watching this closely as our firm has been stalking a short position since March.

SPY 6-10-16

Danaher Corporation (NYSE: DHR) has formed a double top on its daily chart.  This is likely the end of the bullish trend that this stock has been enjoying for the last 4 months, and the odds are high for a test of the $97.50 area as a minimum profit objective.DHR 6-10-16

Bo Yoder

RBJ Financial Group

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Copper sitting at an important and vital level

The Copper price tends to lead and forecast the direction of all commodities and commodity shares. In the week past the Copper price fell with momentum to a very important support line.

This support was defined by a 78% retracement of the last daily range and the support line of a falling wedge technical pattern. The falling wedge is a bullish pattern. This is an important confluence of two uncorrelated trading techniques.

Furthermore the pullback from the high in March occurred in three waves of a similar degree. This three wave pullback after a strong advance charted a bullish pattern called a Gartley 222. The 222 is quite easy to see for those skilled in reading harmonic patterns. It’s also a bullish pattern and there is lots of information on the pattern available on the internet. The Copper chart is shown below.

David

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If this level breaks and both these bullish patterns fail then Copper and commodity shares have much further to fall.

The falling wedge, its sister the rising wedge and the Gartley 222 have been my favorite trading setups for many years after learning the techniques from H M Gartleys book. For this reason I am optimistic that the level in Copper can hold and have taken a small bet “long” from this level. As I write at the end of the trading week the Copper market has charted a double bottom on an h4 chart and that’s a positive although a very early sign.

I like the trade as I am onboard at a great level which means I need only a small risk to prove whether the trade will be a winner or not. If my analysis proves correct then there is blue sky ahead and lots of potential places to add and build a monster position. My analysis over the years has proven to be correct about 70% of the time. This means 30% of the time I am wrong. On the next trade we don’t know whether it one of the 70 or one of the 30. Getting you head around that and thinking in probabilities is what the business of short term trading is all about.

Clearly if the level holds then commodity shares (after days of big falls) can be a great buy. I haven’t bought any as yet but will be looking to take my first longer term positions in the large London listed miners if my analysis holds. Over the past year my activities in commodity shares have been short term (3-13 days) swing trades.

I am extremely excited about the future in commodity shares. As I have communicated at the webcasts and User Groups, there will be a life changing percentage move in these shares sooner or later.

This entry is brief as I am travelling this weekend. However it could easily be the most important I have done in this forum. Please sit and wait until a bottom has been confirmed. If these levels break then Anglos et al have a lot further to fall.

MR Gann favored waiting until a swing low was in place. Early in his work he used a three day swing chart but later in his career and life changed to a 2 day swing chart. This simply means that the market should record two days of increasing highs prior to the bottom being made.

On Friday morning VectorVest advised caution in buying shares and it was sage advice. World markets fell hard and the fall in London aided by a Euro “in or out” opinion poll. Sterling tanked.

The DEW market timing system remains positive and the underlying trend is UP and Confirmed by price action. The Primary Wave turned down on Friday and my shares had a poor day. Dart I have long felt has a date with 600 and its getting close to that. It can easily get down to 550 which is 62% of the last range.

Gleeson is the lowest in my portfolio when sorted by RT and 2 pence above its stop. I will have no hesitation in getting rid of this share if the stop is confirmed by a close below the value.

Marshalls has hit the VectorVest stop. The share bottomed out on Friday at the confluence of a 62% retracement and where resistance became support from a trendline starting at the high of last October. The chart shows another Gartley 222 pattern which is bullish but the price and the VectorVest stop are reality. If the market turns back upwards there is a lot of potential in Marshalls.

It’s going to be a volatile run until the 23rd of June.

David Paul

June 10th 2016

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The 6,300 points’ level is the key pivot area for the FTSE 100 this week

This morning I am looking at the FTSE 100 trading just above the 6,300 points and I am wondering what’s next, I am sure a lot of you have been doing the same recently as the London index has been constantly changing its direction over the past couple of weeks.

It is true that the FTSE has fallen victim of the current market volatility in light of the upcoming EU referendum and at the same time the global macroeconomic climate doesn’t seem to settle down. Apart from the uncertainty that comes with the still undecided Remain/Leave vote the climate in the global markets has been shifting back and forth as a result of mixed economic data from abroad.

Just this Friday for example investors were caught off guard when the Non-Farm Payrolls report from the US, a very significant market-moving report, missed its mark by a wide margin. So after a couple of weeks that the Fed hinted than they were moving towards a tighter interest rate policy sometime around the next couple of months now the sentiment is back to being uncertain.

So even though the FTSE looks poised to continue higher given the broader economic sentiment I would be cautious at least until we put the EU referendum behind us. This doesn’t mean that no trades are allowed but it should mean that we need to pick our trades more carefully and only focus on the short-term horizon.

Personally I am focusing on the 6,300 points’ area at this time, if the FTSE manages to remain above this key level then I am confident that we can see an extension towards the 6,380 area on the short term, barring any surprises of course. On the opposite case if the momentum to the upside dies out and the FTSE retreats below the 6,250 points’ support then the 6,200 points’ area and last week’s lows around 6,150 will come into focus.

alpesh

If you want daily trade signals on the FTSE 100 and the Euro, the Pound, Gold and more Forex, Stock Indices and Commodities instruments I am recommending my Sentinel Signals report that has an impressive performance. You can find more information on Sentinel Signals by clicking on this link.

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An Ugly jobs report

[Watch the recording of David Paul’s webinar from 31st May – Short Term Swing Strategies]

The US no farm payroll report is eagerly awaited each month to measure the health of the world’s largest economy. It was poor and well below expectations and the worst number in many years.

Initially the stock markets of the world fell but by midsession in the US the reality that this would reduce the probability of a June interest rate hike to nearly zero caused a rally. By the end of the day the Dow Jones was back to where it started. The currency and bond markets voted strongly that rates would not rise in June with the dollar tanking across the board even against emerging market currencies that are less than investment grade.

Janet Yellen is speaking on Monday and the jobs number will essentially mean that her talk lacks the ability to surprise the market. I think that rates will now be on hold until after the USA elections towards the end of the year. Clearly the next hurdle for the stock market is the EU referendum on June 23rd. Nervousness around this event has already pushed the cost of insurance (known as forward cover) against a move in sterling to the levels of the crisis of 2008.

Gold was the big winner of the day jumping 30$ as the currency weakened. Also a 5% jump in the amount of negative yielding Government debt to 10.5 trillion dollars may have helped the rise in price. Gold may not pay a yield but at least it doesn’t cost to park your cash in the yellow metal.

I had an order in Gold at the 78% retracement of the last daily range at 1204$. The market stopped at the 62% retracement and I missed the fill.

Saudi Arabia has appointed its first new oil minister in 20 years. In a recent Vienna meeting of OPEC an output ceiling was proposed but no number agreed. Veteran oil analysts believe that the days of uncapped production are numbered. The oil price stayed above 50$ in Fridays trading. The correlation between stock markets and the oil price remains intact.

[Start your 5 week course with David Paul including 5 week trial of VectorVest US & UK – click here]

The Dow found strong support at 17690 which is where trendline resistance from the sideways flag formation of the last few weeks has become support. I traded the Ft100 intraday on Friday twice using a 15 minute intraday view. I was long on both occasions simply using my “Lost Motion” entry signals on that timeframe. It’s exactly the same trade as I described last week which was on a daily chart of a UK building stock. The setup is all about a market falling below an old low and reversing. The reversal should be confirmed by a bar chart pattern or just simply by a close above the lowest bar. The concept is simple and robust and preceded some strong moves. I didn’t trade around the news although there was a valid chart setup.

The VectorVest Composite of the UK is positive for the bulls on all time frames. Both the Primary Wave and underlying trend are UP and the underlying trend has been confirmed by price action. The UK Composite has been signaling a Confirmed Call UP since the middle of February 2016. On the Color Guard Friday close resulted in three green lights. This means that the price, momentum and market breadth was UP both day over day and week over week.

During the week the DEW technique gave a new BUY signal after the close on Wednesday past. I decided to wait on the jobs report before adding to my positions, which I forgot about when writing here, last weekend. On Monday I will consider buying some Marshalls. It would be great to enter Marshalls at around 300. At the 300 level which is 62% of the last move the share will have charted a bullish Gartley 222 pattern.

Dart is charting a triangular formation and is sitting near the support of the triangle after a 3% fall on Friday. I know many exited the share before the pullback and 600 to 620 would make a good level to get back on board.

I am happy with my two construction shares although they will be volatile in the run up to the vote on June 23rd. Both Persimmons and Gleeson are excellent businesses and remain excellent investments.

It’s time to have a relook at Avon Rubber. Technically the share is finding resistance at the technical level and has charted a “double inside bar” pattern at that level on a weekly chart. Please keep an eye on Avon as a break and close above 920 should precede a strong move. At present the share is deciding.

[Start your 5 week course with David Paul including 5 week trial of VectorVest US & UK – click here]

Similarly Keller is consolidating at a technical level defined by an old trendline. The share has been grinding around the 950 level for two weeks. A break above 980/1000 should precede a strong move. I will add to the share if and when this takes place and the DEW remains a positive.

Although considerably overvalued in the short term, Fevertree has a relative value (RV) of 1.5. This means, over a three year window into the future, that Fevertree should outperform an AAA rated corporate bond by 50%. This is an excellent number. VectorVest reckons the share will grow earnings next year by 38% with EPS doubling over the last year. Technically the share recently gapped out of a consolidation pattern and looks bound much higher. There is much more risk in purchasing a share that’s trading above the VectorVest valuation and thus should only be considered by those comfortable with managing risk proactively.

I like both the technical picture and the fundamentals of Costain. The share is undervalued and has a RV of 1.4.  Relative Safety (RS) at 1.22 is good. I always start my technical analysis on the weekly chart. Here I notice that the share has charted a very positive reverse divergence pattern with the weekly Macd. Some refer to this as hidden divergence and others call the pattern a “slingshot”. Recently the reverse divergence has been confirmed by the share trading above an 8 week exponential moving average. A famous trader from the US calls the 8 period average the “trigger line” or the T line. Last week Costain charted an inside bar where all of the price action was contained within the range of the previous week. As in the case of Avon and Keller, a break upwards from this pattern, above 370 should precede a strong move in the share.

The chart of Costain is shown below.

david

 

Markets climb a “wall of worry” and barring a surprise from Janet Yellen on Monday the next hurdle is June 23rd.

David Paul

June 4th 2016

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