Hoop,
Would you please post a chart of NZ50 for us.
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Hoop,
Would you please post a chart of NZ50 for us.
Hi Percy...One of the hardest parts of TA is to figure out a trendless chart which has resulted from a steep previous drop. This dead cat bounce flattened out into a holding trendless event is a worry as it can end up going either way. It has a complex head and shoulder look about it or a diamond ..both really don't fit properly so their resulting line break through 3315 (not drawn on the charts) could be regarded as a less reliable break downwards sell signal.
So what to do...
Many Common TA indicators tend to be confusing during trendless events so work on support and resistance lines, watch for sudden volume changes, momentum.. ignore the media, etc. Also look back long term and see what cycle the index is in (Bull cycle) as a reference to percentage chances.......... With many overseas market turning into a cyclic Bear markets watch the NZX50 for those lower highs and lower lows.
I have added two charts.... the 1/2yearly chart shows us that the NZX50 is retesting its major 3247/3255 support zone.... any break downward would see a test of the 3097 (cyclic change) area....It looks like we are at a cliff edge atm.
Same applies to an upturn buy signal on a higher high (3400) which would test that original primary trendline coming up from beneath it
I have added a 3 year chart to point out the current cyclic bull market cycle.
Personally..I hate trendless index events...thats the reason I'm pessimistic and why I'm not accumulating any NZ shares atm and selling those that have gone doggy.
I took me awhile to draw these charts as StockCharts seem to have wrong data (highlighted on chart)
http://i458.photobucket.com/albums/q...5021112011.png
http://i458.photobucket.com/albums/q...120113year.png
Hoop.
Many thanks for the charts and excellent commentary.I had looked at Yahoo charts and saw NZX50 was under 200 day moving average.I had a friend who wanted to buy some EBO,FRE,HLG and POT.I told her I thought it best not to buy,as NZX 50 looked weak,however I thought FRE was strong.
I will get her to read your post as I think it will give her a clearer picture than I can give her.thanks again.
Hoop - the NZX has been quite resilient over the last year or so -- hovering wrond the 3300 mark
In April 2010 it was 3307. Since then it has gone to 10% below that mark and then went to 8% above the 3300 mark. Since giving that 8% up (plus a bit more for a few days in August) it has essentially been 3300 plus or minus a couple of percent (from 3300 ranging from-1.5% / + 2.9%) since then
Seeing whats going on in the world thats a pretty stable state for nearly 3 months. Wouldn't say trendless but steady at around the 3300 mark
Prob reflects the boring nature of the NZ market .... not much to get that excited about
That
Don't know if I have done the right thing Belg..
Just could not resist picking up NPX today @ $2.40..
It is giving a return of 9%
With the CEO picking up 60000 and a director 20000 a few weeks ago they must have plenty of faith..
Hmmmm.....things are looking a little grim here.
Is this another test of the bottom trading range or something a bit more sinister?
In theory a warning of a trading range breakout comes when a cycle gets cut off from reaching its destination range limit (see A on chart)...Hmmm... theory v in practice agree only in perfect world ..eh?
http://i458.photobucket.com/albums/q...5007122011.png
Hoop,
Thank you for your chart.As you point out things are looking a little grim,and as Belgarion noted liquidity is very low.
Just as well the US had a good night else we would ahve seen the NZX50 falling below 3200 which has not been seen since Septemeber
So the NZ X50 continues to trade within 3300 plus a few % (like 3200 to 3400) - somethign it sone for a while now
Stuff from Stats NZ this morning says our current account deficit for the Sept quarter was $0.7 billion larger than the June quarter .... and that again we saw net outflow of people out of NZ in Nov and for the 12 months the largest net loss since Seot 2001
The attached chart shows our current account deficit over the years (from the Stats report) - as I undersatnd it the amounts are for the quarter so we need to add each quarter cumulatively to get where things are going ..... dosn't it mean we that cumulatively the total deficit is getting bigger and bigger .... and bigger ...... we hardly ever run a surplus .... no wonder the people are following the money out of the country
Prob wrong again in this assessment but thats how I see it anyhow