Tuesday, 21 June 2011

Australian Stock Setups

Morning All,
I thought I would take a little break from my usual analysis and instead show a number of Daily setups of various Australian stocks. My primary vehicle of trading is the index futures but no doubt it pays to look at what is going on under the hood. I was inspired by the work of Rob at TradeTheTrade so a big thanks to him.

Firstly, to the index:

XJO Daily
Yesterday we saw price test the low end of the range and closed below the previous lows. Note this looks like a mirror reflection of what took place at the highs i.e. spillover and then reversal. We remain at the low end of the range and thus this is an area to be covering shorts and looking for possible long entries.


20 to 20.50 looks to be the target zone. In no mans land here unless price regains 22.50 which wold be bullish.

Testing key support and low end of range here. 8.30 then 8.0 are key levels

A base pattern is being formed right here. 49 has to hold for bulls, breakout above 50.75/51.

Base is also being formed here at support. 24 key support, breakout above 25

Has been a violent sell off but price now testing low end of range. Time to cover shorts and look for possible bullish snapbacks.

Lots of panic but a great bounce out of the 16.0 support level. A nice illustration of why understanding the levels is so important. Looking for that gap to fill at 17 and then stand aside in short term.


BHP (i)
Looks like a potential breakdown of support here. 42 to 43 resistance levels

BHP (ii)
However, given my views on the market, to me there is a genuine possibility of this being an ending pattern. Note ending wedge, bullish divergences and the 61.8 retrace comes in at 41. If price regains 42.50+ I think the stage is set for a bear trap and a move back up to 45.50/46. Would this then form a bigger Head and Shoulders pattern?

Possible triangle breakdown here back to horizontal support

Testing key 77.50/78 support level. Buy first, sell it if support drops


Smashed since breaking the H+S neckline. Price has now reached a 100% extension of this topping pattern which is first target. If 10.50 doesn't hold, this could trade as low as 9 before a more meaningful  low forms.

Stand aside. Targets of 1.80 to 2.0 for this move still

Topped at 50 now coming into support at 40. Look at what happened to QBE out of a similar zone. Be prepared for a short term snapback rally. Wait for somekind of confirm before going long


Key zone here. Looking like a potential breakdown play here if 4.0 drops. Target is 3.40/3.50. If there is no breakdown in next 2 sessions then look for long swings up to 4.60 and possibly higher

This is a potential A=C trade i.e. swing low has formed. Small base pattern building at 16 it seems. Aggressive long entry if price can regain 17.50/18.0. Breaks of 16 open up possible move down to 14.