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.
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.
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.
Shoppers Drug Mart breaks technical resistance at $40 on this candlestick chart.
TradeOnline.ca featured Shoppers on February 6 and highlighted the first bullish white candlestick that developed on above average volume. Above average volume is a confirming indicator and is the fuel that drives the upward trend. The $40 level is now support and the stock must hold above this point for the trend to continue.
Shoppers Drug Mart (SC) 6-Month Daily
Shoppers Drug Mart will meet heavy resistance at $42. You can identify this point on the 3-year weekly chart.
Shoppers was upgraded from hold to buy on February 11 and the price target was raised to $43 from $39.
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.
Technical analysis gives you a snapshot of the S&P/TSX composite.
It has been a good run, and now is the time to closely monitor the candlestick charts and confirming indicators for a top reversal pattern.
2-Year Weekly Candlestick Chart for the TSX
This is an excellent article from the National Post covering the fundamental valuation metrics for different markets: Did I miss the rally?
Note: This analysis is for educational purposes so you can learn to trade online using candlestick charts. Please conduct your own analysis or consult your financial advisor before making investment decisions.
The most important point in technical analysis is to determine the trend.
The intermediate and near-term trend for Pfizer (PFE) is up. This drug stock had a very good move last week as indicated by the tall bullish white candlestick. Also, the volume was above average: the volume is the fuel that drives a stock higher. Any upward price movement on low volume is suspect. If the stock can break resistance at $20, the next target price will be $22.
Pfizer, including other drug stocks, has underperformed the Dow over the last couple of years. Pfizer has a decent yield of 4.15% and a solid cash flow. Now, traders are buying this orphan.
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.
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:
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.
There was a small lower shadow which indicated that there was little sell-off after the open.
It was a relatively tall candlestick which was just a graphical representation of the 161 point (+1.18%) move in the index.
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:
You will see the bullish white candlestick where I snipped the chart for this post.
All three short-term simple moving averages are above each other and are moving up.
The close today is above all the short-term moving averages.
The trading volume was relatively high. The trading volume is the fuel that lights the candlestick and should increase as the index rises.
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.
The MACD indicator, a short-term momentum indicator, is moving up in the direction of the price trend.