TSX decline to 13,200 represented a minimum retracement level of 34.4%
There are no firm rules when an index or stock retraces a prior move. The minimum retracement level would be 33% and the maximum would be 66%. If the correction passes the 66% level, there is a high probability the stock or index will retrace the prior move.
S&P/TSX 1-Year Weekly Chart
The most important points for the above TSX chart analysis are:
The 50-day moving average is a good approximation of the trend line.
The major trend ( longer than six months) is up.
The intermediate trend ( three weeks to three months) is up.
The near-term trend ( less than three weeks) is now up.
The March correction was a 34.3% retracement of the July to March upswing.
The March correction was -7.7%.
The support level of 13,500 held on the pullback.
You can reference recent chart analysis of the S&P/TSX index to see where the index made an assault on the 13, 500 level. Then there was the break and the run to the March high.
Maintain a neutral trading strategy at this juncture in the S&P/TSX index with alerts at the 14,200 and the 13,800 levels. A close above 14,200 would be a possible indicator to add to long positions as the index attempts a break through the recent high of 14,300. A close below 13,800 would be a possible indicator to liquidate some long positions as you monitor major support at 13,500.
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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.
One of the most important principles in technical analysis is to trade in the direction of the trend: buy when the stock is trending up. In other words, buy on strength and sell on weakness.
DUNDEE REIT (D.UN-TSX) Three-Year Weekly Chart
The most important points for this Dundee REIT chart analysis are:
The major trend (in effect for at least six months) is up.
The intermediate trend (in effect for three weeks to three months) is up.
The near-term trend (in effect for two to three weeks) is up.
Major support is $30.
Dundee traded in a consolidation range of $30-$31 since November, 2010.
There is a tentative breakout at $32. Will it hold?
A target price of $36 is reasonable based on the chart and fundamental data.
Dundee REIT owns high quality office properties across Canada. Review the fundamental data for Dundee REIT detailed on their website. RioCan REIT, the biggest Canadian REIT listed on the TSX, was featured on this site March 8, 2011.
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 stock in the featured company but is in no way associated with the company.
Can Precision Drilling (PD) hold the new support level of $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.
Bullish white candlestick on the weekly chart for Encana.
Encana Weekly Chart for March 18, 2011
The most important points on the Encana weekly chart are:
The major trend and intermediate trend are both sideways.
The near-term trend (less than three weeks) is up.
Major support is $28: liquidate longs if Encana breaks support.
Major resistance is $36: add to long positions if Encana breaks resistance.
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.
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.
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.
Major support is now 13,500 for the TSX composite index.
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.
Bearish engulfing candlestick pattern on the weekly chart.
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.
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.
