Technical Analysis of Financial Markets

Saturday, December 20, 2008

NetApp, Inc. (NTAP) - Inverse Head & Shoulders ?


Founded in 1992 and headquartered in California, NetApp engages in the design and manufacture of storage and data management solutions for storing, managing, protecting and archiving of business data. Price action is consolidating into a possible inverse bullish Head & Shoulders formation with $14.50 serving as Neckline resistance. An entrance into a long position at the 50-day MA may serve as a low-risk trade with a stop on close below $12.

Thursday, November 27, 2008

Thursday, November 20, 2008

Saturday, November 08, 2008

Friday, October 24, 2008

Elliott Wave Projection – Descending Triangle


Wave IV is seemingly consolidating into a bearish Descending Triangle formation. Wave D of the Descending Triangle may be completing at which point, price action may rally towards creation of wave E. Final fifth wave V ought to see a breakdown of the Descending Triangle towards Oct 2002 lows at approx 7200.

Sunday, October 19, 2008

4th-Wave Triangle ?



Since mid-August 2008, the Dow has declined 33% projecting a three wave Elliott decline. Current price action is consolidating into a corrective triangle pattern which ought to conclude the formation of wave IV. Usually, as triangles occur as part of the fourth wave, the market thrusts out of the triangle in the same direction as the third wave III; this marks the beginning of the final fifth wave V towards new lows.

Friday, October 10, 2008

Nikkei, Elliott Wave 2003 to 2008



As of 10 Oct 2008, the Nikkei is within 5% from testing the low of 23 April 2003 which saw the beginning of a 5 year bull market lasting 1537 days (17th Fibonacci number) ending 09 July 2007. The entire bull market consisting of a 5-wave Elliott formation is currently concluding wave C of an ABC corrective pattern which is poised to retrace 100% of the bull market. Notice how the 423.60% Fibonacci extension level projected from corrective wave 2 has defined the extent of impulsive wave 3.

Wednesday, October 08, 2008

Friday, October 03, 2008

Final 5th Wave In Progress ? -Update


Speculative fifth-wave Elliot projection targetting renewed and probable final YTD low.

Wednesday, October 01, 2008

Final 5th Wave In Progress ?


The decline from Aug 12th has traced a probable Intermediate four wave Elliott formation with the final fifth wave in progress as of Sep 19th. Completion of Intermediate wave IV on Sep 19th also marks the beginning of Minor wave 1; the Minor wave cycle as of Sep 30th ought to have completed formation of Minor wave 4. Continuation of Minor wave 4 may overlap the price action of Minor wave 1 thus invalidating the formation. An entrance into a short position with stop on close above the high on Sep 30th may serve as a low-risk trade towards completion of Minor wave 5 and Intermediate wave V; -possibly truncated creating a double-bottom formation or making a final new YTD low.

Tuesday, September 23, 2008

Patterson-UTI Energy Inc. (PTEN)


Patterson-UTI Energy provides onshore contract drilling services to independent oil and natural gas operators in North America. Price action has delcined 95% within a 3-month period in a seemingly a-b-c Elliott retrace after completing a 5-wave impulse move during Jan 2008 to Jul 2008. An entrace into a buy position with a stop on close below $19.09 may serve as long-term low-risk trade.

Titanium Metals Corp. (TIE)


Industrial metals & minerals manufacturer Titanium Metals Corporation produces titanium melted and mill products. Price action has declined 300% within the last 14-month projecting a probable 5-wave Elliott formation. An entrance into a buy position with stop on close below $9.80 may serve as low-risk long term trade.

Trico Marine Services Inc. (TRMA)


Texas headquartered Trico Marine, oil & gas equipment and services provider to offshore drilling rigs has declined 170% within the last 6-month period in a probable 5-wave Elliott formation. With RSI and stochastics gaining strength, an entrance into a buy position with a stop on close below $16.16 may serve as low-risk trade towards an a-b-c price projection at the 38.2% Fibonacci extension level.

Monday, September 22, 2008

Whole Foods Market Inc. (WFMI)


Having declined 360% within a 33-month period from all-time highs projecting an Elliot a-b-c move; operator of natural and organic foods supermarkets, Whole Foods, is seemingly finding support at $17.50; -a level last seen serving as support 6 years ago. Enter short on a weekly close below $17.50 otherwise remain long.

Saturday, September 20, 2008

Thursday, September 18, 2008

Monday, September 15, 2008

Dow to 10,700 ?


The Dow is approaching the 50% Fibonacci retracement level of the 2003 to 2008 bull market.

Shaw Group, Inc. (SGR)


The Shaw Group provides engineering, design, construction and maintenance services to government and private-sector clients in a wide array of industries, including the energy, environmental, infrastructure and emergency response markets. Having declined over 85% within the last 2-month period, price action is now finding support at the $35 level which served as prior resistance on two accounts during early 2006 and 2007. With RSI beginning to indicate oversold conditions, an entrance into a buy position with stop on close below $35 may serve as a low-risk trade. Otherwise, enter short on close below $35.

Thursday, September 11, 2008

Seagate Technology (STX)


Having halved in value within the last 11-month period since Nov 2006, manufacturer of data storage devices, Seagate, is currently re-testing the $14 level; an area last seen as support during the July 15th lows coinciding with YTD market-wide lows. With positive RSI divergence against price action and oversold stochastics; current consolidation may form a Double-Bottom pattern with a price target of $19 approx. Otherwise, a breach of $14 may see price action decline further to subsequent support levels of $12 and $10.

Monday, September 08, 2008

S&P 500 - Head & Shoulders ?


The Fannie & Freddie bailout saw the the S&P rally over 2% towards the underside of the Neckline of a probable Head & Shoulders formation. RSI support since the July 15 uptrend is now serving as resistance. An entrance into a short position with a stop on close above today's high at 1275 may serve as a low-risk trade.

Monday, September 01, 2008

Boeing Co. (BA) - Elliott Wave


Manufacturer of aerospace & defence systems and jetliners, Dow component Boeing, has completed a 5-wave Elliott impulse formation between April 2003 and October 2007. Current price action may be scheduled to rally towards the underside of the Neckline of a broken Head & Shoulders pattern (coinciding with the 38.2% Fibonacci retracement level of the 5-wave Elliott move), where wave-c of a corrective a-b-c formation may resume.

Sunday, August 31, 2008

STMicroelectronics NV (STM) - Double-Bottom


Having halved in value within a 12-month period, semiconductor manufacturer STMicroelectronics is consolidating into a Double-Bottom formation. A recent 5-wave impulse Elliott formation has seen price action find resistance at the second peak of the Double-Bottom formation at $13.50 approx. The 5-wave Elliott formation may complete with a usual a-b-c correction forming a Head & Shoulders pattern before resuming the Double-Bottom formation. A price target can be calculated by appending the distance from the trough lows to the resistance peaks projected beyond the peaks.

J. Crew Group, Inc. (JCG)


Having declined 100% within the last 4-month period, US apparel and accessories retailer is seemingly finding support at the $25 level; a level last seen since July-September 2006 during the IPO. An entrance into a buy position with stop on close below $25 may serve as low-risk trade. Cramer Likes J. Crew

Friday, August 29, 2008

QQQQ Bull Flag ?


The Nasdaq 100 Trust ETF is listed on the Nasdaq providing broad exposure to the technology sector by tracking the Nasdaq 100 Index. Current price action is consolidating into a Bull Flag formation. The Bull Flag is continuation pattern and usually a price objective can be derived by projecting the magnitude of the previous motive wave (i.e. Flagpole) using an a-b-c corrective measured move. Exit buy position on close below the 50-day moving average.

Predicting the Market

Inherently, it is challenging to forecast the direction of the market purely based on Technical Analysis. Even more complex is predicting market timing. Rarely do both attributes of direction and timing develop as anticipated. However, on this occasion, using classical analysis of trendlines, Fibonacci projections and basic Elliot Wave analysis, occasionally the probable scenario transpires; an infrequent example below:
Original post 19th April 2008: http://stevepuri.blogspot.com/2008/04/bull-or-bear.html
According to the projected path, price action of the Dow may be completing the fourth wave of a 5-wave Elliot decline beginning 19th May. The fourth wave of rising equity prices may complete by the second week of September. At which point, the final fifth wave of declining prices may ensue towards the year end in time for a possible trend-reversal driven by an Election Rally and the seasonal Santa Claus rally into 2009.

Thursday, August 28, 2008

Diminishing Volume; Upside Resistance?


At second attempt, the Dow has again found resistance at the underside of the broken trendline of the rally that began on July 15th. The previous attempt 3 trading sessions ago saw a sell-off of over 200 points. Resistance at this level coincides with the 38.2% Fibonacci extension level from the May 19th to July 15th sell-off low. Diminishing volume over the summer months tends to favour upside price action; however the divergence may result in a trend reversal. A short position with stop on a weekly close above 38.2% Fibonacci extension level may serve as a low-risk trade.

Conversely, the S&P500 has broken and closed above the 38.2% Fibonacci extension level from the May 19th to July 15th sell-off low. An upside target at approx 1310 at a gain of 0.77% will bring price action toward the underside of the of the broken trendline of the rally that began on July 15th.

Tuesday, August 26, 2008

Microsoft Corp. (MSFT)


Microsoft forming a possible bullish Bull Flag pattern. Enter long with a stop on close below $27; price target approx $30.

Big Lots, Inc (BIG)


Having rallied 190% within an 8-month period since Jan 2008, US retailer Big Lots, is currently consolidating into a bearish Double-Top formation with a negative volume and RSI divergence against price action. An entrance into a short position with stop on close above $35 may serve as a low risk trade for an initial price target towards the 38.2% Fibonacci retracement level of the rally.

Friday, August 22, 2008

Dow - Weakening Trend ?


The Dow has rallied 6.6% since the year's low on July 15th. During this rally, a price/volume divergence has developed in terms of rising prices on diminishing volume. The ADX (Average Directional Index) oscillator, a measure of a trend's strength, has been declining against the rising price action signalling a weakening trend. Today's price action saw resistance beneath the underside of the broken trendline of the rally; support has become resistance. An entrance into a short position with stop on close above the 38.2% Fibonacci extension level of the previous sell-off (from May 19th to July 15th) at 11,709 may serve as a low-risk trade.

Wednesday, August 20, 2008

American International Group, Inc. (AIG) - Double-Bottom ?


AIG possible Double-Bottom formation; enter buy position with a stop-loss on close below July 15 low.

Sunday, August 17, 2008

Oil oversold at $110 ?


Having rallied 188% to all-time highs since Jan 2007; oil has retraced a third in value within the last month and is currently finding support at the 38.2% Fibonacci retracement level, coinciding with the 200-day moving average. With stochastics and RSI indicating oversold conditions, an entrance into a buy position may serve as a low-risk trade with a stop-loss on close below $110.


The UltraShort Oil & Gas ETF (DUG) is equivalent to twice the inverse performance of the Dow Jones U.S. Oil & Gas Index. An entrance into a short postion with a stop-loss on close above $40 may serve as a low-risk trade on speculation of rising oil prices.

Tuesday, August 05, 2008

Dow - Symmetrical Triangle


After a 21% decline between May 19 and July 14, the Dow is consolidating into a Symmetrical Triangle formation. An Elliot Wave a-b-c-d-e triangle forming in a prior downtrend with a base range of approx 900 favours a downside break targetting 10,600 approx. Trade in the direction of the breakout from the triangle apex for a low-risk position.

Wednesday, July 16, 2008

FTSE, 50% Fibonacci Retracement


Since October 2007, the FTSE has declined 35% in corrective A-B-C formation where wave C is currently progressing to complete a measured move equal to wave A; i.e. A=C. Completion of wave C also coincides with the 50% Fibonacci retracement of 5-year bull market rally which commenced in March 2003. This may establish an area of support at 5015 in the cash market. An entrance into a long position with a stop on a weekly close below 5000 may serve as low-risk trade.

Monday, July 07, 2008

DAX, 6200 Level


Short below 6200; long above.

Thursday, July 03, 2008

Eurasian Natural (UK:ENRC)


Eurasian Natural having rallied over 110% within a 7-month period has now broken support of the main trendline and is currently finding support at the 50% Fibonacci retracement of the rally. An entrance into a long position with stop-loss on close below the 50% Fibonacci retracement level at 1048 may serve as low-risk bounce trade from oversold conditions towards an initial target gain of 10% at 1168.

Wednesday, June 25, 2008

UBS AG (UBS)


The unravelling of the subprime mortgage events and credit crunch has seen UBS decline 225% within a 12-month period. The decline in price action has traced a 5-wave Elliot pattern and is currently finding support at the $20 level which has served as strong support between 2001 and 2003. The ROC momentum oscillator that measures the percentage change in price from one period to the next is retesting the lows achieved during the climax of 3rd wave of the Elliot formation and is seemingly finding support. An entry into a long position with a stop-loss on a weekly close below $20 may serve as a low-risk trade. UBS is scheduled to report earnings on 12th August 2008.

Friday, June 13, 2008

Paragon Shipping Inc. (PRGN)


PRGN has retraced 61.8% of the rally since March lows. At this point, price action may find support with an expectation of a rebound. However, RSI is not completely and oversold, and oversold stochastics have not yet crossed over to indicate a buy signal. An entry into a buy position at this point may serve as a low-risk trade with a stop-loss placed below the 61.8% Fibonacci retracement level.

Monday, June 09, 2008

CKE Restaurants Inc. (CKR)


CKE Restaurants franchises quick-service restaurants in the United States operating primarily under the Carl's Jr. and Hardee's names. During the past 12-month period, stock price has declined 160% with price action bounded by the 50-day MA. A recent breakout from the declining trendline should see price action targeting Fibonacci extension levels. Stop-loss: close below 50-day MA. Fast food shares mostly rise after McDonald's reports strong same-store sales for May: http://biz.yahoo.com/ap/080609/fast_food_sector_snap.htm

Thursday, June 05, 2008

Aluminum

Having rallied over 40%, the last three month period has seen aluminum prices consolidating into a bullish Symmetrical Triangle formation as part of an Elliot Wave pattern. The Elliott Wave Triangle approach designates five sub-waves of a triangle as A, B, C, D and E developing in sequence as a tightening coil pattern. Sub-wave E marks the completion of a fourth wave of an overall five-wave impulsive Elliot pattern; at which point, the final fifth wave of the formation should see price action breakout to new highs. Stop-loss close below sub-wave E. The ETFS Aluminium Exchange-Traded Commodity (ETC) tracks the DJ-AIG Aluminum Sub-Index and is listed on the London Stock Exchange as ALUM.

Dow aluminum component, Alcoa (AA), is currently completing a b-wave of an impulsive a-b-c wave formation which may see wave-c target YTD highs: