Stock Analysis with ChartNexus

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Ilene Morgan
7 years ago
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Stock Analysis with ChartNexus Singapore SembCorp To participate in an uptrending stock, we can look for a bullish opportunity near the support levels, as it will enable the trader to reap a more

1 Stock Analysis with ChartNexus Singapore SembCorp To participate in an uptrending stock, we can look for a bullish opportunity near the support levels, as it will enable the trader to reap a more attractive reward to risk ratio. Once we spot an uptrending stock, the next step is to identify a bullish trade set-up that will enable us to better gauge the strength of the support levels. A commonly used bullish trade set-up combines the MACD indicator and bullish Japanese candlestick reversal patterns. It indicates a buy signal when we observe that there was a bullish candlestick reversal pattern formed before a MACD bullish crossover happens. As seen in the chart of SembCorp, it is trading in an uptrend as the price actions continue to hover above the 20 and 50-day moving averages. On 28 th October 2010, a bullish Japanese candlestick reversal pattern called Bullish Harami was spotted followed by a bullish crossover signal from the MACD trend indicator. Thereafter, Sembcorp had a rally of 10% to hit a high of $5.01 seen on 10 th November Interestingly, such bullish set-up was being triggered again on 24 th November A break above the immediate resistance at $5.08 may see a further upside push to target the next resistance at $5.54. On the other hand, a violation below the key support at $4.73 may damage the uptrend to trigger a sell-off towards the next support at 4.48.

2 Noble Group To identify the direction of a stock, we use a popular technical indicator called Moving Average. The Simple Moving Average (SMA) is a mean average constructed by summing up a set of closing prices over a specified period and dividing the summation by the period used. The Moving Average can also act as a support level or resistance level when a stock bounces off from it, which in turns will help you time the turning point of a trending stock. An uptrending stock can be characterized by a moving average that is sloping upwards. Next, we will lookout for possible buying opportunities at the support level when a stock touched and rebounded from an upward sloping moving average. As seen from the chart of Noble, it had a correction after hitting a high of $2.03 on 8 th October However on closer inspection, the 50-day moving average is still sloping upwards steadily which indicates that the on-going uptrend is still intact. On 29 th October 2010, Noble has staged a rebound from the 50-day moving average and thereafter it has recorded a rally of 19% within two weeks. A similar bullish signal has been detected in Noble on 24 th November 2010 and the next potential upside target to watch will be the all-time high level at $2.24. However a violation below the immediate support at $2.07 may negate the bullish tone to see a slide towards the next support at $2.00.

Hong Kong Tencent Holdings Ltd (00700) The Moving Average Convergence Divergence (MACD) indicator has a unique feature called crossover signal that will enable traders to spot a change in the

3 Hong Kong Tencent Holdings Ltd (00700) The Moving Average Convergence Divergence (MACD) indicator has a unique feature called crossover signal that will enable traders to spot a change in the direction of any stock. After declining by 13% from its high of HKD seen on 10 th August 2010, Tencent Holdings had a MACD bullish crossover signal detected on 7 th September Thereafter, Tencent Holdings had a magnificent rally of 28% to record a high of HKD seen on 14 th October The current uptrend is still intact for Tencent Holdings as it continues to trade above the 20 and 50-day moving averages. Interestingly, a similar bullish crossover signal is being detected in the MACD trend indicator on 6 th December Given such positive configurations, Tencent Holdings may see an upside push to test the resistance zone of HKD HKD next. On the other hand, a violation below the immediate support at HKD may negate the bullish tone to see a correction towards the next support at HKD

Indonesia Sampoerna Agro Tbk (SGRO) The ancient art of chart reading known as Japanese Candlestick Reversal Patterns will assist traders to detect the change in the psychology of investors and they

4 Indonesia Sampoerna Agro Tbk (SGRO) The ancient art of chart reading known as Japanese Candlestick Reversal Patterns will assist traders to detect the change in the psychology of investors and they are highly useful in identifying turning points in the stock market. By timing the change of market sentiment from bearish to bullish, traders will enable to pick the potential bottom of a stock before it stages a rally. As seen from the chart of SGRO, a bullish Japanese candlestick reversal pattern called Bullish Counterattack was spotted on 29 th November Thereafter, SGRO had a rally of 9% within one week to hit a high of Rp3200 on 6 th December On the upside, a break above the immediate resistance zone of Rp3250-Rp3300 may see a further rally to test the next resistance at Rp3875. However a violation below the immediate support at Rp2850 may damage the current uptrend to trigger a sell-off towards the next support at Rp2650.

5 Author Profile ChartNexus is a regional company providing FREE charting software for the investment community. The above mentioned stocks are being selected from an assortment of trading strategies that can be easily downloaded from the Library section of the XPertTrader, a powerful stock screening tool. The company organizes free XPertTrader workshops where you will see a LIVE demonstration on how to spot the next big mover in the stock market using XPertTrader. For more information, please visit or support@chartnexus.com.

Disclaimer: The authors of the articles in this guide are simply offering their interpretation of the concepts. Information, charts or examples

Disclaimer: The authors of the articles in this guide are simply offering their interpretation of the concepts. Information, charts or examples contained in this lesson are for illustration and educational