Monthly Archives: February 2011

Suncor – Shooting star candlestick

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The intermediate trend (three weeks to three months) for Suncor is up.

But the shooting star candlestick is a warning signal: it is like a yellow light indicating caution. I do not want to see a close below $40 which is a support level. The next major support point would then be $35.

Technical analysis for Suncor listed on the TSX - shooting star candlestick

Suncor - 2-Year Weekly Chart

Shoppers Drug Mart – Bullish white candlestick

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Bullish white candlestick for Shoppers Drug Mart

Daily Chart - (SC)

There was a bullish white candlestick for Shoppers Drug Mart (SC) on Friday, February 4.

It opened at $37.15 which was above the support level of $37.00.  The stock traded to a high of $39.13 and closed at $38.77 which was a gain of 4.18% for the day. The tall white candlestick is the graphical representation of that price action.

Please customize and then reference the full-size chart from Bigcharts.com for a better overall view of the trend.  Shoppers has been trading sideways since October so a break above the $40.00 resistance level would be a significant event.

Read the Globe and Mail article,  Shoppers Drug Mart’s quest for an elixir, for some current background information.

Note: You must take a couple of minutes to customize Bigcharts.com so that the links to the charts open with the indicators used in this site.

Note: This analysis is for educational purposes. Please conduct your own analysis or consult your financial advisor before making investment decisions

The chart snippets are from BigCharts.com which I recommend and have used for fifteen years.

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BigCharts – Advanced chart settings

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Here is how to customize Bigcharts using the advanced chart settings

 

BigCharts - Advanced Chart Settings

You need to take a couple of minutes to input one-time settings to customize the chart view. Now, what you see on your computer is consistent with the explanations on this site.

This link for the 6-month TSX chart will open in a new window in the the advanced settings mode.

Follow these steps to customize the chart:

  1. Select SMA (3-Line ) in the drop-down list. This is the setting for three simple moving averages.
  2. Input 10,20,40 which is 10-day, 20-day, and 40-day simple moving averages.
  3. Select Volume in the drop-down list.
  4. Select OBV in the drop-down list. This is on balance volume which will be discussed in future posts.
  5. Select MACD in the drop-down list.  This is a momentum indicator. I do use other indicators in this option like RSI.
  6. Select Candlestick , Default and Big for the chart style.
  7. Select Store Chart Settings. This will set a cookie on your computer.

Now the settings are stored on your computer and will link properly from the posts.

I will discuss these advanced settings and others in future posts.

Another bullish white candlestick for the TSX

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Technical Analysis: Bullish white candlestick for the TSX

TSX Daily Chart - Feb 3, 2011

TSX closes at 13,841 which was in a whisker of the high for the day of  13,844. When the close is at the high or near the high for the day, the candlestick is classed as having a shaven head.

The bullish white candlestick for today (Thursday) is a graphical presentation of what is logically bullish:

  1. The TSX index opened above both the previous day’s (small red insignificant candlestick)  close and the close for the bullish white shaven head candlestick on Tuesday.
  2. There was a small lower shadow which indicated that there was little sell-off after the open.
  3. It was a relatively tall candlestick which was just a graphical representation of the 161 point (+1.18%) move in the index.
  4. There was no upper shadow: in other words there was no profit taking at the top of the market.

The bulls were definitely in charge today and I now want to introduce the concept of confirming indicators. Please customize Bigcharts so that we are singing from the same page in the hymn book, and then look at the 6-month daily candlestick chart which will open in  a new window. On this chart you will notice the following:

  1. You will see the bullish white candlestick where I snipped the chart for this post.
  2. All three short-term simple moving averages are above each other and are moving up.
  3. The close today is above all the short-term moving averages.
  4. The trading volume was relatively high.  The trading volume is the fuel that lights the candlestick and should increase as the index rises.
  5. The on balance volume is trending up. It should move in the direction of the price trend: if not, we have divergence and this is not good.
  6. The MACD indicator, a short-term momentum indicator,  is moving up in the direction of the price trend.

Shaven head white candlestick for the TSX

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Candlestick Charts: Shaven head candlestick or the TSX

TSX Daily Candlestick Chart - Feb 1, 2011

Technical analysis, using candlestick charts, allows you to gain a quick snapshot of the price action without bogging down in the details.

Today (Tuesday), the TSX opened above Monday’s close and high for that day. The high is indicated by the shadow on Monday’s candlestick.  So, we had a very nice opening to start Tuesday trading: the opening is the rudder for the trading day.

Then the market continued to trade higher and closed at 13,712 which was very close to the high of 13,714. Anytime a stock or index closes near the high of the day, that is a very good closing. It is called a shaven head white candlestick because there is no shadow.

Another important principle to discuss regarding technical analysis is the reversal of resistance to support.  Yes, when resistance is penetrated with a close above that level, that resistance level (13,500) reverses rolls and now becomes support.

Reference the full sized 6-month Bigchart for the TSX,