Author Archives: Trader

TSX Index candlestick chart analysis

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What is the downside risk for the TSX Index?
Candlestick chart analysis for the tsx index showing the downside risk based on the double top and retracement levels.

2-Year Candlestick Chart of the TSX Index

What are the key points from the above chart of the TSX?

  • There is the possibility of a double top at 14,300.
  • Major support on the weekly chart is 13,500. Reference the previous chart.
  • I use a two-day time filter and a 2% penetration rule based on the closing prices.
  • 13,500 will become resistance if the TSX closes below 13,500 using the above filters.
  • 13,200 (near the March 7 retracement of 13,250) would then become major support.
  • Using the above filters, a closing price of around 12,900 would confirm a double top.
  • The downside risk would then be around 12,200.

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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. The author of this article may hold long or short positions in the featured stock or index.

© 2011 TradeOnline.ca

Technical analysis of the TSX Index

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TSX Index in consolidation mode
Three year candlestick chart analysis of the tsx index showing support and resistance so you can trade online using these indicators to make your online trading decisions.

3-Year Chart of the TSX Index

Reference last weeks analysis which was also a consolidation story for the TSX Index. This is in stark contrast to the S&P 500 Index and the Nasdaq Composite Index which are in an uptrend.

Also reference the most recent analysis of the TSX  based on the daily candlestick chart which identified the possibility of  a double top.

When trading online, you always deal in probabilities.  And the probability of a downside correction is greater than an upside breakout.  It has been a good run for the TSX  Index.

Read the National Post article: Now’s the time to diversify away from Canada.

Precision Drilling technical analysis

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Precision Drilling (PD:TSX) candlestick chart with a bullish engulfing pattern
Candlestick chart analysis showing a bullish engulfing pattern on the weekly chart with confirming volume.

Precision Drilling (PD:TSX) 2-Year Weekly Chart

Reference the previous chart analysis for Precision Drilling.

Precision Drilling Corporation (“Precision”) intends to release its 2011 first quarter results before the market opens on Tuesday, April 26, 2011 and has scheduled a conference call and webcast to begin promptly at 12:00 Noon MT (2:00 p.m. ET) on the same day.  Analysts expect earnings of 26 cents a share.

April 26, 2011 Update: The Calgary-based concern on Tuesday posted net earnings of $66 million, or 23 cents per share, for the three months ended March 31. That compared with net earnings of $57 million, or 20 cents per share, in the first quarter of 2010.

Candlestick chart for Precision Drilling showing a doji candlestick pattern in reaction to the first quarter results

(PD:TSX) 1-Month Daily

What will be the reaction on the chart to the first quarter results?  That is all that counts.

A doji candlestick (opens and closes at or very near the same level) formed on the daily chart at the end of trading for Tuesday, April 26, 2011. This was the reaction of the market to the first quarter results. It represents indecision and a battle between the bulls and the bears. Considering the recent run-up in the stock price,  the fact that Precision Drilling stock did not sell off on the earnings miss is a positive reaction on the chart. Set alerts at $15.00 and $14.00 and monitor for the development of a consolidation pattern.
Doji candlestick with the opening and closing price at the same level
The doji candlestick has the same opening and closing price.  In the Precision Drilling chart to the right, the doji is part of a consolidation pattern. But, the doji is an important candlestick especially for indicating tops.  As in all technical analysis, you have to look at the total picture before making a decision based on one candlestick formation.  Always look at the price action the next day to corroborate any pricing pattern.

TSX candlestick chart analysis

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Can the S&P/TSX index break resistance of 14,300?
Three year candlestick analysis of the weekly chart for the tsx index showing volume, support and resistance levels.

TSX 3-Year Weekly Candlestick Chart

What are the key points to note on this  chart of the TSX index?

  1. Major resistance on the candlestick chart is 14, 300.
  2. The index could not close above 14,300 on two attempts.
  3. Is this the start of a double top formation on the weekly chart?
  4. Support on the weekly chart for the TSX is 13,500.
  5. Is the index moving into a consolidation pattern?
  6. Notice how the bullish engulfing pattern signaled the start of the uptrend in March, 2009.
  7. Did you board the train in March, 2009?  I was aboard with rest stops along the way.
  8. Candlestick chart formations indicated where you could disembark the train for rest stops.
  9. The bullish piercing pattern in July, 2010  indicated that the train was leaving the station again.
  10. Now, the train is at the station.  When will it leave?  And, in what direction?

Reference the previous chart analysis of the TSX index.

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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. The author of this article may hold long or short positions in the featured stock or index.

Canadian Natural Resources (CNQ) chart

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Tentative breakout  on the daily candlestick chart
Daily candlestick chart for Canadian Natural Resources with volume, MACD, and OBV.

CNQ:TSX 3-Month Daily Candlestick Chart

The key points from the above candlestick chart are:

  • Tentative breakout above $44.00
  • But, the candlestick on the breakout is not a strong (tall white) candlestick.
  • And, the volume was not above average on the breakout.
  • And, the MACD is still negative.
  • And, the OBV is still negative.
  • And, the three short-term simple moving averages are all negative.
  • But, there seems to be good support at $42.00
  • So,  invest with caution and wait for the earnings release.

Reference the website for Canadian Natural Resources to review the fundamental data.

Reference the Globe and Mail article: Canaccord boosts oil forecast, upgrades energy stocks.

View a more recent analysis for CNQ showing critical support levels.

View the Home Page for current charts.

Johnson & Johnson (JNJ) candlestick chart

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Positive reaction to the earnings release for Johnson & Johnson
Candlestick chart with technical indicators confirming a positive reaction to the first-quarter results for 2011

J&J 6-Month Daily Candlestick Chart

The key points from the above chart are:

  • Positive reaction to the first-quarter results.
  • There was above-average volume on the breakout above $61.00.
  • A window which is a continuation pattern appeared on the candlestick chart.
  • The window will act as support on any pullback.
  • If the window is closed, it will nullify the near-term uptrend.
  • The MACD is confirming the near-term uptrend.
  • The 10-day moving average is confirming the uptrend.
  • The 20-day moving average is confirming the uptrend.
  • The near-term target is $65.00
  • Support is $61.00 if the window is closed.

You can input the advanced chart settings for BigCharts and view the 3-year chart for JNJ.

Reference the Johnson & Johnson website for the fundamental data on the company.  Reference Fox Business for a profile of Johnson & Johnson (JNJ).

Beyond the cliff, dividends, M&A beckon for big pharma is a recent article from the Financial Post.

April 27, 2011 update: Johnson & Johnson is to buy Swiss medical devices maker Synthes Incfor 19 billion Swiss francs (US$21.59 billion) in its largest ever buy, boosting its surgical business and reshaping the wider industry.

May 27, 2011 update: J&J Now the “Best Biotech Play”, Says Goldman

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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. The author of this article may hold long or short positions in the featured stock or index.

TSX candlestick chart analysis

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Is this a Double Top Reversal for the S&P/TSX index?
Candlestick chart analysis for TSX

S&P/TSX 3-Month Daily Candlestick Chart

The most important points from the above chart of the S&P/TSX index are:

  • Major resistance is at 14,300 on the candlestick chart.
  • There is the possibility of a Double Top Reversal bearish pattern.
  • A  close below major support of 13,200 would confirm the Double Top Reversal.
  • Monitor support at 13,800 for the development of a consolidation pattern.
  • There is a major support level of 13,500 on the weekly candlestick chart.
  • Note the negative divergence with the MACD.

A neutral trading strategy is recommended — do not add to long positions — for Canadian stocks with alerts at the highlighted support levels.

Read this interesting article: Bull market quietly enters new phase.

Precision Drilling candlestick chart

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Major resistance for Precision Drilling is $14.50
Precision Drilling three month candlestick chart showing a consolidation pattern

Precision Drilling (PD:TSX) 3-Month Daily Candlestick Chart

The most important points from the above chart for Precision Drilling are:

  • The chart is still in a uptrend.
  • There was no follow-through on the Tuesday sell-off.
  • Major resistance on this candlestick chart is $14.50.
  • Major support on the chart is $12.00.

You should maintain a neutral trading strategy at this stage with alerts at $14.00 and $13.00.  A close above $14.00 will indicate a possible attempt to break resistance at $14.50.  You could add to long positions with a close above $14.50 but this depends on the volume and other indicators at the time of the break.  A close below $13.00 would indicate a possible test of support at $12.00.  You would liquidate long positions if the stock closed below $12.00 with the next support test at $10.50.

You can reference the previous chart analysis for Precision Drilling.  Also visit the company website for fundamental data.

Reference  BigChart.com for the most recent one year daily chart.

Update for April 20, 2011: RBC raises Precision Drilling Corp price target to C$16 from C$12.50; rating outperform.

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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. The author of this article may hold long or short positions in the featured stock or index.