Watch carefully for signs of bulls being in control
By GARRY JONES
Sunday 14 January 2001
The forecast January Jump in the stockmarket is fast turning into a bit of a jam, only eased by Friday's return of the bulls.
So the next three days' trading will need to be watched carefully for the first signs that the bulls are really in control of a market that has been locked between 3150 and 3350 since August.
Now look for the Ords to break above 3250, the most recent peak. And look for more closes at or near the daily highs.
BHP is interesting. Like the Ords, it is caught in a sideways channel, but watch the stock closely as it gets back to $19.90 again. A breakout is possible.
And News Corp is on a bullish turn and NCP can set fire to the Ords because of its weight.
Its upward gap after a $13.50 low is now confirmed with the price reaching to $17. A normal 61.8 per cent retracement of the October-December fall could well see NCP back to $21.35 on this run.
I have been running a 13-day short-term moving average on NCP and it is proving quite useful. Some NCP traders use the crossing of 13-day and a 34-day moving averages to help time their trades. And substituting a 21-day MA for the 34 is very interesting.
Also watch Fairfax. It has just made a bullish break out of a bearish channel that had taken the price down to $3.77 last month. This ended a five-wave bear pattern. The breakout just below $4 was made with a small upward gap between the daily trading ranges. If it continues, the retracement target is $4.70.
Union Capital (UCL) is this week's top interesting Chartbuster. Its chart is a turnaround situation which, following a slide, has jumped from five cents to bounce between 10.5 cents and 13.5 cents, while breaking back above its 34-day moving average. UCL is a well-traded stock particularly so for a relative cheapie so entries and exits are easy.
Westfield Trust (WFT) looks good among the heavies. It bounced off $2.75 in January last year then continued rising to hit $3.55 this month. The current pullback under $3.45 still looks good because the rise has now breached an old Fibonacci price target. Target breaches usually mean that the price will continue to the next level, which, in the case of WFT, is the January 1999 high of $3.70.
Computershare's sudden fall from a $9.90 peak in November to near $7 is worrying because the slide was on sharply rising volume.
CPU had a similar sell-off between $9 and $5.50 over March-April last year and then recovered to break past that old high. Everything is relative. CPU could be bought for 30 to 50 cents in 1996-97.
Telstra has pulled up from $5.65 to bounce around $6.70. Look for a break above $6.80.
FREE CHARTS: For a set of charts on the hot movers, send a large, self-addressed $1-stamped envelope to Garry Jones, Sunday Age, 250 Spencer Street, Melbourne 3000.
This story was found at: theage.com.au |
