Pomysły Transakcyjne

25.03 Buy GBPUSD this week as rally builds

Trade idea parameters

Entry: 1.5215/60

Stop: 1.5027 offered or daily close below 13-day moving average

Target: 1.5340 and 1.5423, a 38 percent recovery of this year's decline.

Trade idea background

Last week saw initial consolidation and a dip towards 1.5000. But this move lower attracted fresh investor demand for the cable and this resulted in a second consecutive positive weekly performance.

The importance of the downside failure at a 76 percent correction of the 2010-11 rise has been emphasised by these two weeks of gains.

Momentum remains bullish in the background and, in the shorter term, the 13-day moving average held last week's dips on a closing basis. The Keltner channel that has defined this year's deterioration is now angling upward which, with prices close to the upper band, signals a positive trending market. 

The indications are that demand will dominate this week and we look for the correction to this year's fall to build towards signifcant recovery points.

Trade management: A move through 1.5340, our first target, would provide the opportunity to raise the stop to breakeven.

Trade idea risk: The risk to this idea is that demand sterling is more temporary and limited than currently assessed. This is likely to be signalled by a clear daily close beneath the 13-day moving average.

Chart - Rally Builds

Rally Builds

Chart - 76% Corrected

76% Corrected

Chart - Average Supports

Average Supports

Chart - Longer Term

Longer Term


25.03 EURJPY attracts fresh demand

Trade idea parameters

Entry: market and 121.51

Stop: 121.12, the three-week low

Target: 124.50, the two-week close and 125.80

Trade idea background:
The pullback since March's high has attracted fresh demand near 121.50, a 62 percent pullback to the gains posted since February's low. Today's gains in Asia have ended a sequence of lower daily highs and signals continue to point to further gains.

Trade management: Trading to the first target allows the stop to be raised to the entry point

Trade idea risk:
The risk would be for the window left open since the last two-week close at 124.57 to attract sellers, and for losses through the three-week low at 121.12

EURJPY Daily - 62% pullback

 

EURJPY Weekly - 2.5 year highs

 

EURJPY Yearly - Key 50% recovery


19.03 Sell GBPUSD for temporary setback towards 1.5000

Trade idea parameters

Entry: 1.5100/10 area

Stop: 1.5145, yesterady's high, bid or today's close

Target: 1.5052

Trade idea background:
For the second day in succession, the Cable consolidated after last Thursday’s strong gains. The important 13-day moving average has supported these two days and the reaction to that line continues to be important on a closing basis.

Momentum is bullish in the background and the Keltner channel is showing a positive tone. But while these factors support the currency pair in the days ahead they are countered in the immediate term by lower highs over the last two days and intraday signals for sentiment that are mildly negative.

So we look for a temporary setback towards 1.5000 as an intraday move.

Trade management: A move through 1.5074 would give the opportunity to lower the stop to breakeven levels.

Trade idea risk: The risk is that support/buying interest is greater than currently assessed with the setback shallower. This would be signalled by a move beyond yesterday's top.

Chart - Consolidation

Consolidation

Chart - Gradual Decline

Gradual Decline

Chart - Long Term

Long Term


19.03 GBPUSD-Descending triangle signals lower levels today

Trade idea parameters

Entry: Sell GBPUSD on a break of 1.5071

Stop: Stop can be placed at 1.5101

Target: 1.5040, 1.5000 and 1.4967

Trade idea background: Cable lacked any clear direction yesterday with all trading within Friday’s range (1.5176-1.5069), an indecisive Inside Day. However, the intraday chart highlights the pair making lower highs and a descending triangle formation (that has a bearish bias) has been posted. A break of 1.5071 and the measure move target will be 1.4967, four pips above our key support for the medium term bullish view (61.8 percent of the last move higher).

Trade management: A move through 1.5040 and we look to lower the stop to the breakpoint.

Trade idea risk: Risk would be a false breakout indicate by a move back through 1.5100

Four-Hour Chart:

GBPUSD 4hr

18.03 Volvo going higher at last - buy the dip


Swedish large cap stock Volvo (Volvb:xome) looks as though it is about to make an important break higher. Horizontal resistance and an uptrend line containing price is forming a triangular-looking structure. This formation is building steam and strength ahead of what could become a nice break higher.

Prerequisites: The Volvo stock has moved much like the overall market, bottoming out along with the Swedish market in November 2008 at around SEK 29 before heading substantially higher. The stock then ran into trouble in January 2011 when it set its bull market peak at about SEK 122. The following slump bottomed in October 2011 just below SEK 64 and has since then been in an uptrend.

The current uptrend is defined by the 50-day and 200-day moving averages trending higher along with the RSI indicator which is also trending higher. However, the uptrend has so far been contained by the horizontal resistance found at about SEK 100. I think we can assume that this line is of high importance because it has been tested both as support and resistance on at least five occasions in the past three years. Support is defined by the rising trend line in the chart below. The uptrend line combined with the horizontal resistance line is forming a formation that has the shape of a triangle, which indicates that buying pressure is stronger than selling pressure as each bottom is set higher and higher on multiple timeframes.

Chart: Volvo Daily technical overview

Volvo Daily technical overview

If we can clear the resistance we could get a fast move higher as pressure on resistance has been building for quite a while. If we break through my first target is SEK 110 (which is derived from the 100 percent extension of the move from the October low in 2011 into the top in early 2012 and the drop into summer the same year), the next target would be the SEK 122 level - the bull market top so far.

Trading thoughts: This stock sure is flirting with resistance and Friday we had the highest close since 2011; a breakout should be bought I think. The tricky part is the fact that the overall market is a bit stretched and a general pullback is imminent I think (due to Cyprus event it might have started). Such a development should affect the Volvo stock as well and we should get a dip. In my opinion the dip could be bought as long as the uptrend line isn't violated. In this case I would like to see a dip towards the SEK 95 level to increase risk/reward. If I get this chance I would be eager to take it since I could use a fairly tight stop and be ahead on the next test of resistance. The stop could then be placed just below the uptrend line. SEK 90 would be a good level for a stop I think.

If we for some reason get a breakout right away, make sure we get a strong close on the breakout candle before buying, i.e. wait until the end of the trading day. Use a 5 percent stop.

Take profits at the first target at SEK 110 or higher your stop to where you entered the trade once this level is reached and take profits at SEK 122.

 

Chart: Volvo Daily trade chart with trade targets

Volvo Daily with trade targets

Chart: Volvo Weekly long term overview

Volvo Weekly long term overview

18.03 Upside USDCHF gains should be limited; Sell rallies

Trade Parameters 

  • Product: USDCHF
  • Position: Bearish bias – sell at .9494 or a break of .9416 (80 pip stop)
  • Target: .9379, .9308 and .9263
  • Stop: 50 pips from entry

Key points: Although USDCHF traded to a six-month high on Friday (.9566), the rally was strongly overturned resulting in USDCHF posting a bearish Outside Week, often a signal of exhausted bull market momentum and the start of a new negative bias. If we look to the weekly chart we can clearly see gains at the channel top being rejected. The pair has ‘gapped open’ overnight (close .9382 open .9443) but USDCHF has stalled close to last week’s Marabuzo level (of .9449).

If we look to the daily chart we can clearly see levels above .9529 (261.8 percent extension) being rejected, a bearish signal for sentiment.

The outlook is still for lower levels and we look for this 'window to close'. A full AB=CD formation is located at .9503 and 61.8 percent pullback of last week’s bearish move is located at .9494.

Trade management: We look to move stop to entry on a break of .9379 (last weeks low)

Risk: The risk would be 50 pips from entry.

 

Weekly, Daily and Two Hour Charts:

USDCHF weekly

USDCHF Daily

USDCHF 2 Hour

Disclaimer:
Non-independent investment research
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