Tag Archives: resistance

Can Encana break resistance at $36?

Leave a reply
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 .

TSX at an advanced stage in this intermediate swing

Leave a reply
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.

Positive market reaction to RioCan quarterly results

Leave a reply
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.

____________________________


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

Near-Term trend for BMO is up

Leave a reply
This 6-month daily candlestick chart for BMO reveals that the near-term trend is up and the intermediate trend is sideways.
Bank of Montreal (BMO) 6 month candlestick chart reveals that the near-term trend is up and the stock will meet heavy resistance at $62

BMO - 6-Month Daily Chart

The most important concept in technical analysis is the trend: you always trade in the direction of the trend.  The near-term trend for BMO, last three weeks,  is up  and is defined by the 10 day simple moving average (SMA) which is above both the 20 day and 40 day averages. The intermediate trend, last six months, is sideways with support at $58 and resistance at $62.

This brings up the another important concept in technical analysis — support and resistance.  Take a look at the chart.  BMO could not break $62 on three attempts over the last six months.  Both the bulls and the bears have memories of this price point. BMO will meet technical resistance at $62 in this rally.

The three confirming indicators:

  1. Volume is relatively light which is a negative indicator.
  2. On Balance Volume (OBV) is trending up with the move which is good.
  3. Relative Strength Index (RSI) is trending up which is good.

The shaven head ( stock closed at the high for the day)  white candlestick for Thursday was positive for the bulls.

Bank of Montreal was last featured on  tradeonline.ca on January 7, 2011

____________________________


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

Copyright © TradeOnline.ca All rights reserved

Shoppers Drug Mart (SC) breaks resistance at $40

Leave a reply
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.

Technical Analysis: Shoppers Drug Mart - candlestick chart - a bullish white candlestick breaks resistance at $40 on Monday, February 14, 2011

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.

Copyright © TradeOnline.ca All rights reserved

85.2% gain in the TSX since March, 2009

Leave a reply
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.

Technical Analysis - 2 year weekly annotated candlestick chart for the TSX showing trend lines, piercing patterns, tweezers bottom, bullish engulfing pattern and the mighty hammer.

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

Copyright © TradeOnline.ca All rights reserved