Last week was clearly very eventful - I won’t go into it here but I do refer to bits of the Politics with some of this Week’s Charts.
On a more positive and exciting note, Aston Girl (@Reb40 on the Tweets) has booked her flights to come down from the Top of Scotland and visit us in Sunny Windsor on Saturday 23rd September 2017 and therefore that is the date of ‘Wheelie’s Summer Bash’.
You may have seen me mention this before; last year we did a small gathering of about 15 People but this year we have decided to open things right up so anyone is welcome along. It should be a really fun event and is entirely informal and pressure and stress free. We will meet in a PUB which is yet to be confirmed in the Windsor locality and there is no ‘Entrance Fee’ or any such nonsense. If you wish to come then please email me or tweet me or something - I just want to get a rough idea of numbers so I can find a suitable PUB and I can warn them to expect 300 people !!
Don’t feel put off if you are a new Investor or whatever - I assure you there will be loads of like minded people and everyone is welcome. It is a rare opportunity to meet Real Investors who have a lot of experience and knowledge that they are willing to share. I expect it to kick off around Lunchtime and no doubt some of us will still be there well into the Evening.
Let’s get Charting………
GRI is an interesting Stock because there is a clear shift towards the Private Rented Sector (PRS) with Owner Occupiers of housing declining and DIY Landlords being battered from all sides (as ever, Governments are trying to squeeze out ‘The Little Man’ (and Woman)….). GRI has recently sold off all its interests in Germany and is now focused on the UK - I don’t hold GRI, but it is certainly a Stock I like. However, from a Valuation point of view it is less easy to make the case for GRI - on a Forward P/E of 21.7 and just 2.1% Dividend Yield it is pretty pricey and any Buyers now have to be very sure it is going to keep on delivering and might even beat expectations.
The Chart is interesting though - starting off with the Long Term view going back to the 2009 Lows, the Chart below shows a very wide Range since then as marked by my Parallel Black Lines (marked with the Black Arrows). The Price is currently still within this Channel but near the top part of it. Recently the Price has broken out (where my Yellow Circle is) from a Horizontal Resistance Level as marked by my Green Line (with Green Arrow) - this is Bullish behaviour.
As ever, all Charts are from the classy ShareScope Software that I use.
The Chart below zooms in on the Chart above to about the last 2 and a half years. My Red Arrow is pointing to where the Price has now pulled back to the Green Breakout Level from the previous Chart and note it is also sat on the Darker Blue Wavy Line which is the 50 Day Moving Average - Bulls need the Price to turn up now off of these Strong Support areas and doing so would be a good Buy Signal from a Technical viewpoint.
Where my Blue Arrow is note there is a Bullish Golden Cross between the 50 Day Moving Average and the 200 Day Moving Average which is the fainter Blue Wavy Line.
Dixons Carphone DC.
On fundamentals I quite like this Company although the Chart looks pretty ropey. There has been a lot going on here since the merger of Currys and Carphone Warehouse and Charles Dunstone departing is not so good. In terms of valuation on a Forward P/E of 9.7 and 3.6% Divvy Yield it is not looking expensive and at some point it could be worth a look - but wait for the Chart to tell us when to move. I don’t hold DC.
The Chart below is a Long Term sort of view going back about 5 and a half years. Note my Black Arrows which point to the Parallel Black Lines which form a nice Uptrend Channel which ran until the start of 2016 and then we got into a Downtrend Channel as marked by my Parallel Red Lines and Red Arrows - we are still in this Downtrend and there is no point in buying until it is broken free of to the upside.
On the Chart below I have zoomed in to clarify things a bit. The Red Arrows are huge as a result of this zooming so the size of them means nothing !! For this to become a Buy we really need several things to happen - although they might all pretty much coincide I suspect.
First off we need the Price to escape (Breakout) of the Upper Red Line and I would suggest we need it to clear the Green Horizontal Line (marked with the Green Arrow) at about 345p. In addition, where my Yellow Circle is we should get a Bullish ‘Golden Cross’ between the 50 Day Moving Average and the 200 Day Moving Average (these are the Dark Blue Wavy Line and the Lighter Blue Wavy Line).
The simplest Buy Signal would be a Breakout of that Horizontal Green Line.
I was just moving on to the next Stock when I saw the feature below on DC. - as always these are Daily Candlesticks and my Pink Circle below is highlighting a Hammer Candle from Friday - this could be a Reversal Signal before the Price moves up again - a ‘Confirmation’ would be given if the Price Opens higher on Monday.
Royal Mail Group RMG
This is one I hold in my Income Portfolio as it is kicking out a Divvy of 5.8% for Next Year if things go to plan and this is a story of Cost Cutting and Property Values, and recent Results went down very well. I just wanted to point out how the 50 and 20 Day Moving Averages (as per the Blue Arrows) are converging together and although we are probably some weeks off, we might see a Bullish Golden Cross here - something to watch.
RPC Group RPC
This one came out with Results that superficially read ok but the Market really didn’t like them - it seems like the growth has been very much driven by Acquisitions and they are well out of favour. It is an interesting Chart though - my ScreenShot below goes back about 6 years and the first thing to notice is my Black Support Line marked with my Black Arrow - it seems unlikely the Price will fall back this far but if RPC does get in more bother, then this is an important level that must hold.
The thing I really wanted to show was the ‘Head & Shoulders’ pattern which came before the Drop - as they should predict. The Head bit is my Yellow Circle and the Shoulders are in the Pink Circles.
The Chart below zooms in to about the last year or so - my Black Downtrend Line marked with the Black Arrow needs to be broken-out of if RPC is going to recover and the Green Support Line at the bottom with the Green Arrow must hold and not be broken to the downside.
My Blue Arrow is pointing to a 50/200 Day Moving Average ‘Death Cross’ (the opposite of the Golden Cross I go on about) and this was a sign that trouble was around.
I went up to Trafalgar Square about 6 months ago for a seminar that had IDOX presenting - I quite like this business and in particular their recent move into IT stuff from the Health Sector looks a good strategic move. I noticed this Chart the other day and how there was a Triangle going on here. I don’t hold IDOX.
The Chart below goes back about 2 years and the Triangle is between the Black Line at the bottom (marked with my Black Arrow) and the Green Line at the top (marked with the Green Arrow). Bulls need the Price to stay above the Black Line and ideally for it to go back up and eventually breakout of the Green Line - we are some way from that I would guess.
Please note I have done a bit of ‘Line Fitting’ with the Black Line as it doesn’t have all that many ‘Touch points’ - I have used my subjective Judgement here but however things play out, if the Black Line fails and the Price drops below then there is trouble.
I just had a quick look at the Numbers - on a Forward P/E of 13.8 and a 1.7% Divvy Yield this doesn’t look bad value (assuming trading is going ok).
Time for some Indexes then……….
Of course this is very much dependent on what happens on the Political front next week and in particular how any agreement the Conservative Party tries to secure with the Ulster Unionists goes. If an agreement cannot be formed then there could be big trouble and we would probably see the Pound plunge - it is perceived wisdom that the FTSE100 would rally on such Pound weakness (and we saw this play out on Friday) but I still have my doubts as the fear of a Labour Government could easily cause Stocks to sell off.
The danger here is that if the Conservatives cannot get a Queen’s Speech through a Vote, then there would probably be a vote of ‘No Confidence’ and yet another General Election (I think that is how the events would be sequenced) - I suspect if this were to play out then the Tories would get a right kicking from the Electorate who would be livid at having to endure yet another unnecessary Election.
This Chart is very similar to one I showed last week - the key feature here is probably that ‘Inverted Hammer’ Candle from Friday 2nd June which is caught in my Green Rectangle. With its high point at 7600, this is very much the Key Resistance Level for the FTSE100 to break above now - any hits to the Pound and maybe this will happen.
Since that Inverted Hammer, we had a few down days before the Election and then after the shocking Result the Pound tanked and the FTSE100 rallied on Friday as per my Yellow Arrow - in purely Technical Terms this is a pretty Bullish looking Chart.
The Red Line with my Red Arrow is the Long Term Uptrend Channel Bottom Line which I have shown week after week in my Chart updates and the Black Line is Horizontal Support that was established by a Breakout of Long Term Resistance at about 7100 - both these lines are Very Strong Support.
Don’t dwell on this one - all I want to show here is the Uptrend Channel (the Parallel Black Lines) since the 2009 Lows and how we are still nicely within that Channel.
In the Chart below I have zoomed in to the last 8 Months ish. Note the Uptrend Channel marked by the Parallel Green Lines and where my Black Arrow is marks a Hammer Candle from Friday which could be a Reversal Signal after the move down in the previous days leading up to the Election.
Note the Hammer went outside the Bottom Green Line of the Uptrend Channel and this could be an ‘Overshoot’ rather than a breakdown of the Uptrend - although we won’t really know for a couple of Days - the key thing now is that the Bottom of the Hammer at 19552 must hold - if this fails then expect the FTSE250 to go lower.
My Red Arrow is pointing at the Blue Wavy 50 Day Moving Average Line - note how we touched it again with Friday’s Hammer and this needs to hold as Support.
Pound Vs US Dollar
It seems sensible to cover this one next bearing in mind how it impacts the FTSE100. It is very difficult to predict what will happen next week and we could see some crazy moves on the Pound - but the Chart does give an idea of where Support and Resistance are.
My Chart goes back on the £/$ for roughly the last Year and the first thing to notice is the rough Range at the bottom between about 1.21 and 1.26 - there are some Overshoots above and below but the Range seems to be roughly between these Levels.
My Pink Rectangle is capturing a ‘Long Tails Doji’ from Friday which is pretty much as uncertain as it gets - but the clear thing here is that the bottom of the Doji is near that 1.26 Level which could act as good Support now.
To the upside 1.28 is clearly Resistance as this was the Intraday High on Friday and above that we have the Bottom Line (pointed at with my Green Arrow) of a previous Uptrend Channel - this is around 1.30.
My Yellow Circle is highlighting the recent 50/200 Day Moving Average ‘Golden Cross’ - this suggests gains in coming Months but after the fiasco of the Election Result it is doubtful if this scenario can hold - it is too early to tell and of course depends on “Events, dear boy, events”………
I’m fixated by this Index because I saw some Trade Opportunities here with the Breakout of the All Time High at 12391 a few Weeks ago. I did a Long Trade and made a little bit of Cash on it but I would like the opportunity to go Long again and I think it might arise very soon.
My Blue Arrow is pointing to a Big White Up Candle from Friday and this looks to me like the Index is turning up again after a bit of weakness during last Week. The key now is the New All Time High Level at 12879 - if that is broken over then that would be a Signal to Buy the Index. I would want this to be on an End of Day Close basis - Intraday Spikes can easily go wrong. I will be watching closely in the next few days.
In the bottom window on the ScreenShot below we have the MACD (Moving Average Convergence Divergence) for the DAX - where my Blue Arrow is it looks like we are on the verge of a Bullish MACD Cross (note this is in the Histogram Bars format - the lines above show a different representation of the same phenomenon - doo doo doo doo doo………)
Dow Jones Industrials Index (US)
This is just so bullish. As per recent weeks, this is yet another story of Previous All Time Highs being taken out - my Pink Circle is capturing where this happened again on Friday. Shorting these Markets still remains deadly.
I won’t show them here but the Nasdaq Composite and S&P500 were less Bullish than the DOW with both dropping on Friday - the Nasdaq dropping quite a bit. I think it is still too early to call the Top though.
Brent Oil (Spot)
This continues to look rough - first off note my Black Arrow which is pointing to a Bearish 50/200 Day Moving Average ‘Death Cross’ - clearly not good.
My Yellow Circle is capturing a Doji From Friday which suggests the power of the move down over much of last week is waning - so maybe a small Bounce can happen with Support at around $47 but I would guess upside is limited to Resistance up around $50 to $52.
To the Downside, Support at $46 is important but most crucial is the Strong Support at $43.575 - if that fails then we really are in trouble…….
There is a distinct lack of Heiken Ashi Candles in this Blog so I need to correct that here !!
The Chart below shows Big Down Red Candles in the Yellow Circle which suggest more falls for Brent Oil (Spot). These HA Candles are ‘slow’ but they give very clear Signals - it could be that the Doji Candles on the previous Chart are giving an earlier signal of a Bounce - time will tell !!
A quick reminder of the Long Term Downtrend Line marked by my Red Arrow first off.
Quite a momentous occurrence Last Week - we broke-out of the Red Long Term Downtrend Line as per my Yellow Circle below - however, in the last 3 Days it fell back and the Gold Price is now back inside the Downtrend Line. This could simply be a False Breakout although with the Bullish Golden Cross between the 50 and 200 Day Moving Averages as marked by my Black Arrow, I would expect Gold to make more gains.
Ideally I would want to see Gold breakout over $1300 and that would make me more confident that Gold is now going to move up on a sustainable basis.
OK, that’s it for this Weekend, good luck y’all,
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