Banks

Reading price charts which may give you direction in the market using established TA methodology
oldcharlie
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Banks

Postby oldcharlie » November 21st, 2016, 12:04 am

Thought it might be interesting to book at the Banking sector.

There are very clear support and resistance levels on the sector index. Currently, up against a major level at 5350 which was support in 1997/8 and now 4 or 5 times resistance in 2009/10/11 and 13.

I cannot look at all the Banks tonight but I will start with Barclays.

Although there has been a nice gap up recently when it broke through minor resistance at 190, Barclays is now making heavy weather of another major support and resistance level around 210/215. Support is at 125 and the next major resistance is 255/70.

Barclays is overbought on momentum but I fancy this will correct and then move forward again.

The Cloud chart is positive and it seems to be moving in a fairly predictable channel up.

OC

oldcharlie
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Re: Banks

Postby oldcharlie » November 21st, 2016, 3:19 pm


oldcharlie
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Re: Banks

Postby oldcharlie » November 21st, 2016, 8:04 pm

http://uk.advfn.com/p.php?pid=chartscre ... l=L%5EBARC

Candle chart: long term. Note the potential resistance that might come in at the apex of the triangle.

oldcharlie
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Re: Banks

Postby oldcharlie » November 22nd, 2016, 10:56 am

Barclays and Fibs.

I will have a hard job showing fib retracements on Barclays on Advfn so you may have to take my word for it!

The price is at a very sensitive juncture: bang on the 23.6% retracement of the whole bear market 800p down to 50p between 2007 and 2009. Also the 38.2% retracement of the highest high and the lowest low since 2009.

More important is the fact this is it just on the down trendline from 2007 close to its intersection with the up trendline drwn from the lows in 2011 and 2012.

Until Barclays clears the down trendline linking the sequence of prominent highs on the chart since 2009 (somewhere between 280/300) it could be vulnerable to further downside movement.

I would say that the immediate short term trend is bullish but overbought and up against significant resistance. medium term if is in a sideways market and overall, long term it is bearish.

OC

oldcharlie
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Re: Banks

Postby oldcharlie » November 23rd, 2016, 12:02 am

http://stockcharts.com/freecharts/pnf.p ... 0!!2!20%5D

HSBC Holdings: P & F box size 8.

In a strong up trend short term. Overbought and showing bearish divergence so correction possible. Will look at a candle chart for resistance.

OC

oldcharlie
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Re: Banks

Postby oldcharlie » November 23rd, 2016, 12:34 am

http://uk.advfn.com/p.php?pid=chartscre ... l=L%5EHSBA

Clear break through the down trendline marked in red. 600 looks to be pretty firm support.

Resistance I have put at 750 but it is possible to draw a couple of lines up to 800.

OC

zxc100
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Re: Banks

Postby zxc100 » November 23rd, 2016, 2:31 pm


tramrider
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Re: Banks

Postby tramrider » November 23rd, 2016, 9:52 pm

http://uk.advfn.com/p.php?pid=chartscre%20...%20l=L%5EHSBA

Clear break through the down trendline marked in red. 600 looks to be pretty firm support.

Resistance I have put at 750 but it is possible to draw a couple of lines up to 800.

OC


I don't understand why the time scale on this ADVFN graph is 2009-2013? Is this relevant now?

Tramrider

oldcharlie
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Re: Banks

Postby oldcharlie » November 23rd, 2016, 11:49 pm

I like to analyse the longest history available as it is surprising how often support and resistance levels repeat over time. Also support turns to resistance and vice versa. This core tool of analysis is based on the idea that the Market has a collective memory for prices or rather investors store and remember past prices. There are major and minor horizontal levels. Major ones tend to cluster around previous major tops and bottoms.

It rather depends on your type of trading. If you are a very short term trader than I suggest you read the daily IG analysis which gives excellent short term levels to watch. If you are a LTBH investor then the levels that I tend to produce may be more useful.

Fibonacci retracements are similar. I noticed after I wrote about HSBC that it is trading around the 61.8% fib retracement of the last leg down. 50% and 61.8% (sometimes abbreviated to 62%) aften lead to corrections. So, combined with the overbought nature of momentum, I think a correction is likely now rather points to a correction soon (haven't looked at today's data).

As a recent poster about describing TA said it is part science and part art. I am an old fashioned chartist.

OC

oldcharlie
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Re: Banks

Postby oldcharlie » November 24th, 2016, 12:33 am


oldcharlie
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Re: Banks

Postby oldcharlie » November 24th, 2016, 12:48 am

HSBC and the 62% retracement.

http://uk.advfn.com/p.php?pid=chartscre ... 02TJeQY%3D

The first big rally after the crash in 2009/19 retraced 62%.

770 was to prove a resistance again on the next run up!

OC

oldcharlie
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Re: Banks

Postby oldcharlie » November 27th, 2016, 12:33 am

http://uk.advfn.com/p.php?pid=chartscre ... l=L%5ELLOY

Lloyds Banking Group'

Lloyds bottomed with a clear, regular, Inverse H & S formation which completed in September 2012.

It then trended up to 90p approx, hitting a high in June 2015.

It has just completed a 61.8% fib retracement of the up trend 2011/2015. Macd weekly has signalled up and the MACD looks bullish divergent. The daily Cloud Chart is also just rising above the cloud. Weekly is still underneath.

I will try to post a P & F chart (box size 5 and 3 reversal) in the next post. That gives a tentative (ie not confirmed yet) target of 200p.

I am neutral on the stock until a new upside target is confirmed on P & F. It will be interesting to see what Stockcharts make of it.

OC

oldcharlie
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Re: Banks

Postby oldcharlie » November 27th, 2016, 12:44 am

http://stockcharts.com/freecharts/pnf.p ... 0!!2!20%5D

The only way I can show the base, the run up and the current pullback is with a daily 1.0% and 3 reversal chart on Stockcharts. This chart is giving a modest upside target but I think it illustrates very clearly the big horizontal resistance in the mid-70p area.

OC

oldcharlie
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Re: Banks

Postby oldcharlie » November 29th, 2016, 10:55 am

This is the last section of Lloyds chart:

http://uk.advfn.com/p.php?pid=chartscre ... l=L%5ELLOY

Although this has retraced 62% fibonacci, I could well see this taking another dive. Watch that latest minor uptrend marked red, especially if it gaps down as it did in the earlier formation.

Note how in this formation, there is less excitement and speculation (as shown by the two gaps up and then the huge downside move marked by a circle which negated them). I guess there were a number of tipsters active at the time or news of some kind, first positive and then negated by results(??).

I find inserting text in ADVFN charts very difficult and impossible to delete without removing all previous notations. The arrow and the circle indicate the gap down.

OC


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