The JSE and finance forum for South Africa
General Category => Shares => Topic started by: Snakepit on March 07, 2014, 07:51:48 am
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They say knowledge is power. I mentioned that some forum members are "strong" on technical analysis. You can place your chart in this thread and we will give comments about what we see on your chart.
DISCLAIMER!! We do not at anytime say that you should buy a share based on our analysis. Don't be silly. We do not say that technical analysis is the alpha and omega. We do say that it has it's place in analyzing what to buy and when. Do your home work. We just want to help you make a more informed decision.
By placing a chart in this thread you agree to and understand the above. Is that clear?
Specifications:
1. It must be a candlestick chart. Green and red candlestick charts are the best. The patterns we analyze are in the candles. Next to reading the ticker tape of price, candles is the best.
2. The shorter the time frame, the better, as patterns appear in an hour chart that you might not see in a daily chart.
Now let's see if we can help you make a million bucks!
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He-he, I like your impromptu disclaimer. Good idea.
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Ja while typing the first line, a thought popped into my head - what if someone goes and buys a million shares based on our analysis and the share takes a nose dive? Let's face it, shares, cfd's, futures, they all pretty risky items to trade. Maybe shares are less risky, but they all still have a risk component.
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ABL. The first one here. Coronation obviously can see fundamentals here that made them pick ABL so maybe for long term it is good but here is a chart.
She is trading in a down channel with no reversal signal as yet and has been doing that for a long time now.
That Gap left behind is of no use as traders will not trade it up to there and haven't done so for yonks. The share price is too low for traders to be interested. Perhaps she will keep that small support she is on now.
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Okay what I see on SBK's chart.
A resistance (ceiling) point was formed on 12 Dec. Price cut it came back to test it and failed. That ceiling was tested twice and both times price could not get through. Remember that price R10.90
The hammer - formed on 14 Feb (R9.37), now that is the important one. I expect that hammer to be tested to see if it is solid. I would not buy this share at this stage, but when we hit that hammer, if we do, I would keep a very close eye on it. Yes as you mentioned, we are on small support, but we so close to that hammer. Why not go and give it a poke, even if it's just a long tail on a candle! Also take note that R9.00 was very big resistance in 2001 and 2002. It is now support and that is where that hammer ended at R9.06. On SBK today ended in a Gravestone Doji with higher price rejection and that is why I think the market want to go and test that hammer. So let's see what happens.
ORCA, I notice something. I compare the Standard Bank chart to the Reuters chart. SBK shows a big gap 8 November to 11 November. Reuters does not reflect it at all. It was a massive price drop of almost 5 rand. Not good when you get conflicting charts. However both charts show the hammer.
I see a head and shoulder pattern on the Reuters chart but I don't see it on the SBK chart. Will have to investigate which is more reliable.
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Wonder if Coronation bought it just after that previous hammer. Would make sense. But this share takes months to go anywhere.
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Daily chart.
Now please, elaborate on the 'hammer'?
Edit:
No worries, figured it out: hammer is a bullish reversal candlestick pattern, (14th Feb) 1 candle, long lower wick, short body at top with no/little upper wick.
And inverse would be ‘hanging man’ or bearish reversal pattern, 1 candle, found in up-trend, long lower wick, short body at top with little or no upper wick.
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Ja Moneypenny, that's the one. Big gap. So I have to assume that the Reuters charts have a glitch!
I also noticed on Tuesday that EMI was showing a hammer on Reuters, but the next day it was.... "gone". Ja I know it sounds crazy. But if an airlines can lose a boeing, who am I to say that a hammer can't disappear?
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What was the cause of the gap at that time, I wasn't following ABL then but I know there was an unsecured lending issue?
If yes, then I guess it will take a long time to fill that gap, even with days like today with a 4.9% up?
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Ja Moneypenny, that's the one. Big gap. So I have to assume that the Reuters charts have a glitch!
I also noticed on Tuesday that EMI was showing a hammer on Reuters, but the next day it was.... "gone". Ja I know it sounds crazy. But if an airlines can lose a boeing, who am I to say that a hammer can't disappear?
My chart is Reuters and it shows there. I know that sometimes Reuters shows wrong info for CML. Red candle instead of green for the day.
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What was the cause of the gap at that time, I wasn't following ABL then but I know there was an unsecured lending issue?
If yes, then I guess it will take a long time to fill that gap, even with days like today with a 4.9% up?
The mere fact that it is an old gap says that traders are not interested in trading it. That gap will close with normal growth and will not be a Resistance level when eventually reached. Just ignore it.
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Orca, no you confused. The chart you posted shows the May month gap. The one we talking about is the 8 November gap. Moneypennies chart also shows the Novemebre gap.
On the issue of gaps - I beg to differ. Gaps always form R/S points. If a gap is under price, it's support. Above price it's resistance. Based on my experience and unfortunately it is based on futures trading, 50 points into a gap is always first resistance if the gap is above you. Steve Nison and the big candle traders including the Japanese, they all love gaps when trading shares. But to prove this, we should go back in time and investigate what happens around gaps on SA shares.
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Orca, no you confused. The chart you posted shows the May month gap. The one we talking about is the 8 November gap. Moneypennies chart also shows the Novemebre gap.
Nov gap caused buy a rights issue, effectively diluted the share price. So it's not a gap that would be generally closed by traders.
The Rights Offer will consist of an offer of 685 281 693 new ABIL ordinary shares (â??Rights Offer Sharesâ?ť)
at a subscription price of 800 cents per Rights Offer Share. The subscription price is at a discount of
38.72% to the theoretical ex-rights price of an ABIL share of 1305 cents on 30 October 2013. The
subscription price represents 92% of the tangible net asset value per ABIL share before the rights offer
and 98% of the equivalent number after the rights offer. Rights Offer Shares will be issued to qualifying
shareholders in the ratio of 84 (eighty four) Rights Offer Shares for every 100 (one hundred) ABIL Shares
held on the record date for the Rights Offer, being close of business on Friday, 15 November 2013
("Record Date"). Fractions of Rights Offer entitlements will not be allotted and each qualifying
shareholderâ??s Rights Offer entitlement will be rounded to the nearest whole number in this regard (unless
a qualified shareholder is entitled to less than 0.5 of a Rights Offer share, in which case the entitlement
will be rounded down to zero).
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Thanks Aragorn for that information. It will be interesting to see what price does with a non price created gap.
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What about this gap on NPN that was overshot today?
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A great Android app to download is "Japanese Candle". Try it. Get it from Play Store.
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Fist things first - ABL had an engulfing candle, that did not follow through. As a matter of fact, it gapped down the next day. Gapping down is pretty serious on a share. We see gapping down often on futures, but on shares it's like someone is on a mission.
Now one of two things can happen.
1. They test the middle of the body of the engulfing candle cause that is the first support point and then go up or
2. The engulfing gets eaten up and the market does go and test the hammer.
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Naspers being what they are, oh and by the way, I worked for them for 7 years, seeing that gap I immediately asked myself who is dragging Naspers down. Tencent is the culprit it seems. But that is beside the point. Let's look at the technicals.
I see a possible island reversal. I also see that they jumped right into the support line of a Shooting Star of 17 Jan's. Dem that was beautiful! hehehe. Should have taken a long at that support line. But I guess you can't scalp shares.
I also see that they jumped a hammer of 3 March. Pretty hectic to jump hammers. Who's trying to drive the price down or have they already succeeded? What I expect is for price to go and test the bottom of the 3 March hammer but it would have to push past the top of Friday's hammer first. If you did buy on Friday, be careful.
Up till September last year, all the green candles were a good size, but then suddenly they all became small candles, like someone was throwing on the brakes and the red candles became longer candles! Yes here and there is a longish green candle, but was that just greed pushing up the price? Hmmm that would have created warning signs for me. Small and long candles show eagerness or the lack there of, in a share's direction.
There is something wrong with this share. Why did it gap down so much when it reached the super high? Why not just pullback slowly and go and test a few lower points and then go up?
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Oh I almost forgot. Orca on the Reuters chart that you posted, Friday's candle shows as a Doji. On the SBK chart, Friday's candle shows as a Hammer. Doji's are "can't make your mind up" situations and hammers form at support points. So once again I warn. Be careful of what you read from the Reuters chart.
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NPN seems to be struggling to get above it's hammer of Friday. Are they going to jump the hammer and then jump right into the next hammer's bottom?
ABL - Sideways spring - I would wait for a breakout above R10.60 but even better is a breakout above R10.85 :whistle:
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I'm so ready to short this one, but will wait until the end of this month after dividend, also depending on Grandma Yellen tonight.
Opinions anybody?
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This one on the other hand, no need to wait for a short, just go for it. {Talking to myself - not suggesting anything to anyone. O:-)}
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BGA - Formed a Doji today, closed a gap and the top of the gap is resistance + it's the bottom of a hammer. 14418 is a wall of worry. Don't know if you should short this one yet. A close under 14168, I would short yes.
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Thank you for input Sp.
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Moneypenny, my pleasure.
I'm having a hardtime with BGA charts tonight. On SBK we have Dragonfly Doji and on Reuters and FT.com we have a Hangingman. I don't know which is correct. I need reliable charts. :wall:
Let's assume it's a Hangingman. What I have noticed in SA on futures, a hangingman is seen as a reversal, but in the states a hangingman is seen as a lower price rejection. But we in SA so lets assume the possibility of a reversal. Wait for confirmation.
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MSM - Had an engulfing candle yesterday to go down, but threw on breaks today with a Highwave candle. Shorting has not been confirmed!
Where a Doji is a signal of indecision, a Highwave candle is seen as balance between the bears and bulls with a very slight edge towards the color of the candle. Once again, on futures I take note of Highwave candles as they do cause a change in direction.
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NPN - According to FT.com chart, they closed right against resistance. Can they push threw on Monday or are they going to sink back? There is a big support zone under them with a hammer. If they don't push threw, I suspect they will fall back to that support zone. It was serious support in January and February.
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Just to add some clarification on technical analysis. Guys remember that we work on probabilities. 80% Of the time the candle signal is valid, but it is that 20% that messes up the works. There is not a single candle signal that is 100% reliable. Wish there was. I would have been a billionaire!!! :LHST:
I have see a hammer get eaten up and spit out with the next candle and hammers are pretty reliable. It hits your stops and make them fly all over the place like shatterproof glass. It rips the gore out of your heart and there is nothing, absolutely nothing you can do about it. :'(
That is why futures traders are use to taking knocks. As long as we make far more than what we lose. :whistle:
Now, with permission, if you are interested in learning more about candles and futures from SA okes, go and check out http://www.realchartist.com/. No demmit, I don't get money for this! I am sending you to a place of knowledge. Realchartist is down here in Cape Town and not in some overseas location. A bunch of local guys and girls.
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As I don't trade anymore, I only use signals and chart lines that show trend reversals for longer term for entry mainly. Then look for gaps that might get filled to aid me in my decision.
It's good to get to know Snakepit's shorter term signals especially for me that lives monthly off my investments and need to time my sales.
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MSM - Had an engulfing candle yesterday to go down, but threw on breaks today with a Highwave candle. Shorting has not been confirmed!
Good call Sp
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Dem I got it right!! ???
Na, just joking. Glad I could help. I think I should have been a teacher. I feel good if someone else benefits from my knowledge. :laugh:
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As I stated, I don't do trading signals but here is a simple example of how to time your buy area. This is MTA using the 100sma. Each stock has it's own SMA. You just have to find it. If it touches the 100SMA then it is a buy.
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Ja MA's do create S/R zones. The secret is to wait for confirmation before taking trades. MA's or any other indicator for that matter can be broken like a twig. Remember I warned about the 80/20 rule in an earlier article?
MTA is under a support zone. A close above R42.28 would be the less risky entry for me. That put's you above the R/S zone. That Doji of 26/03/2014 messes up the works. If they wanted to go up, why create an indecision candle?
On top of all this, yesterday there was a massive volume spike on the hour chart. I don't know why but surely a share that is getting ready to bounce should start showing green candles? I don't like reading too much into volume. In this case for example, was it shorts taking profit or was it shorts getting in to drive the price down or was it stops being hit?(http://www.topyields.nl/stock-details-ft.php?SYMBOL=mta%3AJNB&x=5&y=5)
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Dem I got it right!! ???
Now if only I listened to you.
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MTA is not a popular trading stock so I will not be too concerned about short term. For the long term investment guys, this would have been a good point to buy. The RSI is low and the price has hit the 100ma support line.
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MTA is not a popular trading stock so I will not be too concerned about short term. For the long term investment guys, this would have been a good point to buy. The RSI is low and the price has hit the 100ma support line.
Bounced off it and made 4.9% today.
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Great. Happy for you. :TU:
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Guys, just something I noticed. Growthpoint had a breakout on Friday according to FT.com charts. Ken Calhoun would have been all over this share as it complies with 3 conditions that he requires for a breakout. http://www.topyields.nl/stock-details-ft.php?SYMBOL=GRT%3AJNB&x=8&y=4
1. A long candle was used to do the breakout.
2. Big volume on that candle
3. A close by more that 20 cents above breakout line
Of course this is also number 8 on the list of best dividend shares - http://www.topyields.nl/Top-dividend-yields-of-JSE.php
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Wall Street Charts today 2 Min & Daily
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