Author Archives: Trader

Precision Drilling breakout above $12 resistance level

Can Precision Drilling (PD) hold the new support level of $12?
Daily Candlestick chart for Precision Drilling showing the breakout above resistance at $12

Precision Drilling Daily Chart

The most important points to note in the Precision Drilling (PD) chart analysis are:

  • The major trend, intermediate trend and near-term trend are all up.
  • The 40 day moving average is a good approximation of the trend line.
  • Always trade in the direction of the trend.
  • There was a breakout above resistance of $12.
  • Major support is now $12.
  • The reversal of resistance to support is an important principle in technical analysis.
  • The breakout was on above average volume.
  • Trading volume measures the force behind the move.
  • On balance volume is confirming the upward trend.
  • The MACD confirmed the breakout.

If an online trader made a buy on the breakout at $12.50, the trader must set up a stop-loss at that time.  A reasonable stop-loss would be below support at $12.  A stop-loss of $11.87 would represent a loss of around 5% and maybe not close enough  that it would be taken out on a light test of support. Anyway, you will be around to trade another day.  Risk management is an important concept in online trading.  Preservation of capital is rule #1.

Precision Drilling is a leading provider of oilfield services.

Other stocks analyzed on this site include: Encana, SuncorRioCan, BMO, Shoppers Drug Mart, Pfizer, BCE and Patriot Coal.

Investors are seeking yield.  RioCan has been a favorite with institutional and individual Canadian investors.

Can Encana break resistance at $36?

Bullish white candlestick on the weekly chart for Encana.
Bullish candlestick chart for EnCana showing major support at $28 and major resistance at $36

Encana Weekly Chart for March 18, 2011

The most important points on the Encana weekly chart are:

  1. The major trend and intermediate trend are both sideways.
  2. The near-term trend (less than three weeks) is up.
  3. Major support is $28: liquidate longs if Encana breaks support.
  4. Major resistance is $36: add to long positions if Encana breaks resistance.
  5. Above average volume on the bullish white candlestick.

To trade online, you need a grasp of both technical and fundamental data. Natural gas the next ‘green hope written by Gwyn Morgan is an excellent article.  After months of quiet negotiation, energy giant Encana Corp has agreed to buy a minority stake in a natural gas export project that is positioned to redraw Canada’s energy map.

Encana in the largest natural gas producer in Canada. Visit the Encana website to research the fundamental data on the company.

Some of the other Canadian stocks  featured on this site include:  Suncor, Precision Drilling, RioCan, BMO, Shoppers Drug Mart and  BCE .

Can the S&P/TSX index hold support at 13,500?

Weekly candlestick chart for the TSX index showing support at 13,500

The tsx index sold off last week as shown by the long dark candlestick and bounced off support at 13,500.  The chart for this week shows the spinning top candlestick which is neutral and indicates uncertainty in the market.  The positive point here is that the index is currently—as of the close on Wednesday—holding the support level.

This two year weekly candlestick chart of the tsx index shows a spinning top candlestick above support at 13,500

TSX Two Year Weekly Candlestick Chart

The overall online trading strategy at this stage in the market is to raise the cash level in your portfolio and not add to your long positions. Some so-called value investors are adding to income producing stocks on the dips which include real estate investment trusts (REITs) and some of the financials. And the day traders will be trading the range of 13,500 and 14,000 in their online trading accounts: buy at support and sell near resistance.

Take a few minutes to customize BigCharts so you can view the above chart with the same settings on your computer.  Take a look at the two-year annotated chart for the tsx index for a historical perspective of the market. This story from the National Post lists some of the fundamental data moving the markets.

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Note: This technical analysis is for educational purposes so you can learn to trade online using candlestick charts. Please conduct your own chart 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.

Copyright © TradeOnline.ca All rights reserved

TSX at an advanced stage in this intermediate swing

Major support is now 13,500 for the TSX composite index.
Technical analysis - A bearish engulfing candlestick pattern for the tsx index which could not hold 14,000

1-Year Weekly Chart for the TSX Composite Index

From the July 5, 2010 low of 11,065; the index gained 29.5% to the March 7, 2011 high of 14,329.  This has been a significant move  over this eight month period. I usually look for reversal patterns to develop when the market has an intermediate move of 20%.  The TSX is at an advanced stage in this intermediate swing and any technical evidence indicating a reversal must be taken seriously. In other words, the odds of a  correction are much greater than the odds of an upward move.

Reference the two-year weekly annotated chart for the S&P/TSX composite index to get an overall perspective for the market.

Suncor candlestick chart analysis

Bearish engulfing candlestick pattern on the weekly chart.
Suncor weekly chart shows the bearish engulfing candlestick pattern with support at the 50 day moving average and major support at $40

Suncor 2-Year Weekly Chart

The previous post of the chart analysis for Suncor was based on the daily candlesticks.  This analysis is based on the weekly chart and shows the same information from a different viewpoint.  Current support is at the 40 to 50 day moving average with major support at $40.  We do not want to see Suncor close below support at $40.00.

This is not the best looking chart over the two-year period: the major trend has been sideways.

Fundamental data for Suncor to complete your evaluation of this TSX listed stock.

Some of the other Canadian stocks that have been featured include: Encana, Precision Drilling, Riocan, BMO, Shoppers Drug Mart, and  BCE.

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Note: This technical analysis is for educational purposes so you can learn to trade online using candlestick charts. Please conduct your own chart 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.

Copyright © TradeOnline.ca All rights reserved

Is the sun still shining on Suncor?

A confluence of negative technical indicators for Suncor on the daily chart.
Technical analysis for Suncor using a candlestick chart, moving averages, OBV and MACD

Suncor 6-Month Daily Candlestick Chart

Major support for Suncor is at $40.00 on this daily candlestick chart.  You must monitor the chart at this stage for a candlestick pattern that indicates the stock can hold this support level.  The near-term trend is down: Suncor has moved below the 10 day and 20 day moving averages.  Can the stock hold the 40 day moving average?

Please reference the the March 11, 2011 weekly chart of Suncor for another perspective.

The February 6, 2011 chart shows Suncor struggling at the $40 level which is now major support.

RioCan Real Estate Investment Trust Chart Analysis

The trend is the most important concept in technical analysis.

You must always trade in the direction of the trend, and the major trend is up for RioCan Real Estate Investment Trust.  All the real estate invest trusts (REITs)  listed on the TSX  have performed very well over the past two years.

What is the definition for the major trend? The three-year weekly candlestick chart is best for establishing the major trend (in effect for six months to a year) for a stock or an index.   The major trend for RioCan is up with current resistance at $24.

Technical analysis using candlestick charts for Riocan Real Estate Invest Trust - REIT

3-Year Weekly Chart for Riocan

RioCan is the largest real estate investment trust in Canada and the  liquidity makes this an attractive investment for institutional investors. It is worth taking a few minutes to review the profile for this company.  Even if you focus on technical analysis to trade online, you need to have a basic understanding of fundamental analysis. Also, review the most recent quarterly results for RioCan.

Take a couple of minutes to input the advanced chart settings for BigCharts and then look at the this chart.  You will have the advantage of viewing a larger chart and the ability to adjust the time period and other technical indicators. In a previous post, I presented an analysis of RioCan based on the 6-month daily candlestick chart and the reaction of the market to the release of the quarterly results. This analysis focused on the near-term and intermediate trend.

Visit Investment Talk with SPBrunner for an excellent review of the fundamental data for RioCan Real Estate Invest Trust.

Retail real estate poised to strengthen is a positive article on RioCan and other REITs.

Update May 19, 2011 – First-quarter report: RioCan gets boost from rental revenue.

Update May 31, 2011 – Target’s store picks a bullseye for RioCan REIT: TD

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Note: This technical analysis is for educational purposes so you can learn to trade online using candlestick charts. Please conduct your own chart 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.

Copyright © TradeOnline.ca All rights reserved

Positive market reaction to RioCan quarterly results

How did the market react to the Riocan quarterly results?

It does not matter what I think about the results and it does not matter what you think about the results.  The only thing that counts is the market reaction: the candlestick chart shows graphically that the reaction was positive. The next question: what will be your reaction to these results?

Six month daily candlestick chart for Riocan showing the raction ot the quarterly results

6 Month Daily Chart for RioCan

Online trading strategy: RioCan (rei.un) yields 5.69% at the current price.  The stock had a good run from a low of $11.50 in March, 2009 as both small investors and institutional players poured money into the REIT sector.  When you are getting practically nothing on your money left in a bank account, these yields looked very attractive.  And the current 2-year yield of 1.826% on Government of Canada Bonds is not exactly lucrative.  Money is still flowing into the real estate investment trust sector. Yes,  RioCan is still a buy at the $24 price level and the yield provides downside protection.  RioCan has a monthly distribution of $0.1150 which equals an annual distribution of $1.38.  I would be comfortable with a price target of $28 for this stock which equates to a yield of 4.93%.

RioCan Real Estate Investment Trust Announces Results for Fourth Quarter and Year Ended December 31, 2010. Link to the results and other excellent resources at TMX Money.

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Note: This technical analysis is for educational purposes so you can learn to trade online using candlestick charts. Please conduct your own chart 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.

Copyright © TradeOnline.ca All rights reserved