Tag Archives: RSI

Royal Bank (RY:TSX) chart analysis

Can the price close above the downward sloping trendline?
Royal Banks six-month candlestick chart analysis showing a downward sloping trendline indicated by the 40 day simple moving average.  Can the price break the trendline?

Royal Bank six-Month Candlestick Chart

Has the stock bottomed at the $44.00 level? In the above chart, the stock price for the Royal Bank declined 27% from an April high of $61.00 to a September low of $44.50 over a six month period. At this point, based on the extent of the decline (over 20%) and the time period (over six months), the odds increase that the stock has bottomed. Also, the low of $44.50 is a 50% retracement of the move from the February, 2009 low of $26.00 (view the 3-year weekly chart) to the high of $62.00 in May, 2010. Chart patterns that indicate a bottom take on more significance: it is all about having the odds in your favor. A candlestick pattern called a hammer is highlighted on the above chart. This pattern indicates a bottom and is followed by a bullish engulfing candlestick.

The key point for this chart analysis of the Royal Bank is that the price must make a significant close above the downward sloping trendline. This will be a confirming factor that the downtrend has ended: this applies to all stocks and indexes. My definition of significant is a 2% penetration of the trendline that holds for at least two days. This will indicate the start of a new uptrend or the start of a consolidation phase.

The next step is to monitor the confirming indicators of volume, on balance volume (OBV) and RSI. The volume should increase with the price move or the move is suspect. Volume measures the force behind the uptrend: an uptrend cannot be maintained without above average volume. The next confirming indicator is OBV and it must confirm the uptrend by trending higher. The last confirming indicator is RSI which must move above 50 and move in the direction of the uptrend.

It is always a good idea to have a grasp of the fundamentals for a company. The following is a summary of the bank earnings from Globe Investor: In order of reporting date, here is the final rundown for the latest earnings from the Canadian banks.

Please visit RBC Investor Relations for an overview of the fundamentals for this bank.

Globe and Mail article dated Oct 14, 2011: Hedge funds take aim at Canadian banks

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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.

Technical analysis of the S&P 500 Index

Critical support level for the S&P Index at 1,100

S&P Index candlestick chart with support levels and a downward trend in the RSI

S&P 500 Index Three-Year Candlestick Chart

The S&P 500 Index is in an intermediate downtrend: cash is still king.

Reference the last analysis of the S&P 500 Index which was a more positive chart.

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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

US Bond 10 year yield chart

Has the 10 year yield hit bottom at 1.800%
US 10 year treasury not yield candlestick chart with RSI

US 10 Year Treasury Note Yield

Reference the last chart for the 10 year treasury note.

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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

US Bond 10 year yield candlestick chart

Record low: Not a good omen for the near-term trend in equities
Candlestick chart showing the yield for the 10 year US Government Bond at a low of 1.915%

US Government Bond 10 Year Yield Weekly Candlestick Chart

The 10-year Treasury bond is one of the most widely watched securities as it sets the benchmark for almost every other interest rate in the U.S. economy, from the cost of financing corporate debt and mortgages to credit card balances.

This chart does not show any confidence in the near-term growth prospects for the US economy. Nor does it show any confidence in the ability or will of the EEC to solve the Greek debt crisis.

Read this story in the September 12, 2011 edition of the Financial Post:Treasury 10-year yield falls to record low on Europe debt crisis

View my candlestick chart analysis on the downside risk for the TSX Index.

Read this story in the September 16, 2011 edition of the Financial Post: Reading the U.S. treasury yield signs

What do you think of this story from Bloomberg News? S&P 500 may plunge 21%: Technical analyst. You can review my post from June 25, 2011: Can the S&P 500 Index hold the 200-day moving average?

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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

Shoppers Drug Mart (SC:TSX) chart analysis

Bullish Engulfing Pattern on the daily chart
Shoppers Drug Mart six month daily candlestick chart showing a bullish engulfing pattern with confirming indicators of volume and RSI.  Support and resistance levels are identified in this chart analysis.

Shoppers Drug Mart (SC:TSX) Candlestick Chart

The bullish engulfing pattern indicates a near-term target of $42.00 which is major resistance. Shoppers Drug Mart had a positive day in a down market which is always a bullish indicator.

Reference the previous analysis of Shoppers Drug Mart. You can also search this site using “Shoppers Drug Mart” to review all the historical charts for this company.

Technical analysis is a guidepost and is open to interpretation by different analyst. What is your interpretation of the chart for Shoppers?

Based on a recent study by Morningstar, what country has the world’s highest mutual fund costs? Bet you already knew that answer. Also, what country has the highest banking fees? You can research the answer online using Google.

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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.

S&P 500 Index candlestick chart analysis

Bullish Engulfing Patterns: Size Counts

Three-year candlestick chart analysis for the S&P 500 Index based on the weekly chart and showing bullish engulfing candlestick patterns

S&P 500 Index Three-Year Weekly Candlestick Chart

There is a high probability that the  S&P 500 Index will test major resistance of 1,370 within the next two weeks. Using the 2% rule, a convincing close of 1,400 for two consecutive days would set-up the index for an upside target of 1,470.

A failed low-volume test of resistance would see the S&P 500 index move into a trading range of  1,350-1,250. And then we will be back to monitoring the major support level of 1,250.

 

Reference the previous analysis of the S&P 500 Index using candlesticks

TSX Index candlestick chart analysis

Next support level for the TSX is 12,500

Candlestick chart analysis for the tsx index showing support levels and a double top formation at 14,300

TSX Index - Three-Year Weekly Chart

Key points from the above chart of the TSX Index:

  • Intermediate trend is down.
  • Near-term trend is down.
  • Second week below the 200-day simple moving average.
  • The 50-day moving average has crossed below the 100-day moving average.
  • Three bearish candlesticks for the last three weeks.
  • Last week’s candlestick has a shaven bottom.
  • RSI in a downtrend.
  • RSI crossed below 50.

Did I miss any other negative points?  Do you see any positive indicators?

Reference the previous analysis for 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.