Technical Analysis of Financial Markets

Wednesday, June 25, 2008


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:

Thursday, June 05, 2008


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:

Tuesday, June 03, 2008

Lehman Brothers Holdings Inc. (LEH)

Within a 15 month period, Lehman has declined 180% in a seemingly truncated 5-wave Elliot formation. A fifth-wave in an impulsive pattern that fails to exceed the price extreme of the third-wave implies a weakening trend signalling a reversal; comparable to a bullish double-bottom formation. Put activity is resembling the trading in Bear Stearns options on March 14, the last trading day before being acquired by JPMorgan: