#Brent #DAX Virus fears certainly appear to be fouling airline share prices but it’s perhaps worth mentioning neither IAG nor EZY are yet trading in a zone where panic makes sense. They’re both certainly pretty close to messy, their prices not yet entering the official “lower low” flight level to misery.
However, we’ve decided it’s probably
best not being flippant about Coronavirus. News coverage now pollutes every
single section of Google News – World / Local / Sport / Business /
Entertainment(?) / Politics, Tech, even Science!
It’s doubtless fair to assume folk
will prefer avoid spending any time in flying Petri dishes while panic levels
remain high. This will surely create an ongoing income problem for the travel
industry, making it easy to believe the drops since February 20th may simple be
early warning of trouble. If this proves the case, weakness against IAG below
394p risks proving messy, signalling the risk of further reversal to 334p. If
broken, secondary calculates down at 222p.
Despite being a truly shambolic
reversal suggestion – a 50% reduction on current – this risks not being the end
of the story as “bottom” works out at somewhere between 100 and 138p ultimately.
At present, there is very little
point in drawing a trend line to map the pace of reversals. Were we to do so,
about the best we could suggest is of moves above 550p signalling the drop has
slowed. In reality, any recovery is liable to prove sharp and vivid, if someone
announces they’ve knocked together a cure for Covid-19 in their garden shed! But
to be fair, we’d tend believe above just 462p will give sufficient early warning
for price recovery.
#FTSE, #DAX, #DOW Few things are as enjoyable as having an entire swimming pool to yourself. A lingering cold ensured a visit to a local fitness club and its pint sized pool was avoided. Finally couldn’t take it any more, visiting during Thursday afternoon. An hour of peace and quiet, none of the regular “walrus” swimmers breast stroking their incessant lengths. Better still, the childrens pool was also empty, no mothers and screaming babies. Being alone on a racing circuit or ski slope gives similar levels of confidence, the realisation the only person to compete with is yourself.
And perhaps more importantly, no-one to see you foul up royally!
And then the penny dropped.
A virus with the name Covid-19 is
already stopping people congregating, folk doing it quietly without fuss.
Chatting to the pool staff, visitor numbers are apparently reduced, the
suspicion being customers are simply taking sane precautions. This is in Argyll,
Scotland, literally one of the least populated parts of the UK, traditionally
the last place to declare General Election results. This is due to bad weather
stopping helicopters bringing ballot boxes from the islands. Once, the
predecessor of Royal Mail experimented with firing mail by rocket across some
sea narrows. At this time of year, we’re not exactly tripping over tourists and
a virus will need work hard to spread.
There had been a quiet boycott of a
Chinese takeaway, thanks to the place shutting for a week for the new year. The
owners returned from visiting their family, discovering a sharp drop in trade
thereafter. Eventually, a local social media campaign got the message across
they’d only been visiting family in London and not HK, thus trade started to
return.
Of course, this prompted the
question. How are things over on the mainland?
At present, financial volumes through
London are pretty useful, broadly speaking up 50% from the same period last
year. The Brexit Hiatus shall forever be ingrained in memory and we’ve been
seeing levels of trade increase, since last Decembers election brought what
passes for clarity.
To focus on dangers, the other day
the FTSE hit 6460 and bounced. We’re tending regard this as pretty significant
as the real danger now points at weakness below this level now calculating with
an initial 6243 points with secondary, when (not if) broken at 5858 points.
These “big picture” numbers are broadly similar to our last set of calculations,
suggesting the pace of movement has stabilised over the last few sessions –
despite some utterly mad swings.
Another detail, one we’re not
comfortable with, has been the behaviour of the FTSE in relation to RED on the
chart. Last Friday, the index closed below the trend, a faux pas rapidly
corrected. We shall be extremely alarmed now will closure below this level,
presently at 6685 (roughly).
Nearer term, the FTSE is as
complicated as usual. Weakness now below 6656 looks capable of reversal to an
initial 6615 points. If broken, secondary calculates down at 6533 points. The
other side of the coin comes with movement now above 6724 computing with an
initial ambition at a useless 6743 points. In the event its exceeded, our
secondary works out at a more interesting 6818 points.
#DOW #SP500 When we last reviewed #Sirius (link), we gave criteria for a lift to 5p. Thankfully, the share price has not only reached this level but exceeded it, suggesting a new game is afoot. The share price has been very obviously lifted above the immediate downtrend, hinting the market has plans for the future.
It appears, near term above 5.5p
should bring continued recovery toward an initial 6.8p. Beyond such a level,
things get more than a little vague and we suspect moves shall depend on news
flow, along with overall market conditions. Our secondary above 6.8 calculates
at 7.6p but, thanks to the circled gaps, the share price could easily accelerate
to 8.7p instead.
We’re a little surprised at our 3rd
level target of 8.7p as it doesn’t even come close to covering the gap from 10p
in September last year. Usually, the implication is we should expect some
volatility as the price recovers, ideally banking sufficient energy for some
longer term price growth.
The other side of the coin is at 5p
currently. Any move capable of bringing Sirius below the Grey trendline would
prove a poor show, hinting the forced upward movement has been a mistake.
Visually the chances of this are doubtful unless the company has some further
bad news they intend release. A shuffle below this trend risks real trouble,
taking the price into a zone where 1.4p presents as a “fingers crossed” bottom,
thanks to the ultimate drop target residing at an impossible -17p!
#FTSE #Nasdaq We try and limit ourselves to one day a week, when it comes to answering email requests. Thankfully, recently relisted #Stobart feature strongly in requests this week, making the choice easy. Sometimes, we suspect Lynn Bowles of Radio2 Ken Bruce Show fame must shoulder some of the blame for Stobarts decline!
When, after 18 years, Lynn Bowles
stopped her traffic reports on Radio 2 in March 2018, a decline of Stobarts
share price followed shortly thereafter, a company often mentioned as their
drivers seemed to be a great source of her live traffic information. As the
chart shows, when the famous banter between Ken Bruce and Lynn Bowles ended, the
logistics company share price started a painful downhill road. Rather more
probably the market knew better.
Absolute bottom against this share
calculates down at 2p, this being the level we cannot calculate below. In fact,
some concern will be justified with anything now below 6.8 as this shall be
regarded as early warning for a further decline.
Thankfully, it’s easier to be
slightly optimistic against the share as there’s a chance last weeks 4.5p
following relisting will be deemed “close enough” to bottom to justify a proper
bounce. Presently, the share price needs trade above 15p to calculate with an
initial recovery target of 22p. If exceeded, our secondary ambition works out at
27p. Unfortunately neither target comes close to covering the gap from 71p, nor
troubling the long term Blue downtrend. However, it will be worth watching if
the market finds any reason to exceed 27p in the weeks and months ahead. To be
blunt, any such movement will tend suggest the drop was overcooked, giving
considerable hope the market intends force the price upward again.
#Gold #SP500 Completing our monthly wade into the sewer which is the retail banks, Barclays managed flush itself quite thoroughly down the plughole. At the end of January, (link here) we gave a fairly unambiguous outlook as shown in the image below.
Visually, there’s some hope for a
rebound anytime soon as the price challenges the Red uptrend since 2009. At
present, any rebound needs exceed 158p to give some slight hope as this
calculates with the potential of recovery to 166p. If beaten, our secondary
works out at 185p, visually pretty impressive but failing (currently) to exceed
Blue and scurry into safety for the longer term.
What happens if the share price now
withers below 139p?
Initially we’re looking at weakness
to 135p but should such a point break, life becomes pretty dangerous for
Barclays with the potential of 90p making itself known as secondary.
Thankfully we’re keeping things brief
tonight (Monday) as we’ve been mesmerised by the US markets during their final
90 minutes of trade. Witnessing the DOW achieve a 5.1% rise was truly unusual,
suggesting recent panic drops have been exaggerated, resulting in a situation
where some strong recovery across the markets can be hoped for. In the case of
the DOW, allegedly moves now above 26,750 should prove capable of an 1,100 point
rise!
#BRENT #DAX Retail bank prices behave like a cosmic practical joke. When we reviewed Lloyds in January (link), we warned we’d need review the tea leaves again if the price managed below 48p. During Fridays traumatic session, Lloyds achieved 47.89p, thus forcing us to do some work!
At first glance, Lloyds share price
looks pretty stuffed and yes, weakness now below 47.8p will be regarded as
entering a cycle down to an initial 42.5 with secondary, when broken, at a
bottom hopefully of 31p. However, there’s a bit of a wrinkle with this argument
and it’s shown with the Closing Price insert on the chart.
It could prove to be quite important
the market ensured Lloyds Bank share price did not close below the trend,
instead effectively closing at Red, hinting at a coming rebound.
This being the case, it’s perhaps
important to point out the glaringly obvious. Until such time Lloyds share price
recovers above Blue, we dare not take any recovery seriously. At present, this
particular stumbling block resides at 62p.
Near term, above 53.3p looks capable
of bringing an initial 56.25p. If exceeded, secondary calculates at 59.7p and
visually collides with a glass ceiling which appears to have formed just below
the 60p level this year. There’s certainly a strong argument favouring movement
above 59.7p being taken as early warning for a future attempt at the banks share
price breaking above Blue, hopefully to enjoy some time in the sun.
#FTSE #Gold A week ago, we thought we risked being panic merchants by giving criteria postulating an early warning scenario for a FTSE drop to 5,850 points. Given the UK index has managed lose nearly 700 points, it has dragged itself into a region where 5,850 is no longer such a daft idea. But crucially, all we have seen is early warning. We have yet to witness, (from our perspective) confirmation.
In fact, if we drag out the chart
from the market plunge of from Oct 2008 until Mar 2009 and get busy with a Red
crayon, the market has yet to break through the final uptrend, the one which
will suggest the recovery (?) from the lows of 2009 has failed. Unfortunately,
the market is getting close and closure below 6,700 will tend tick a fairly
major box for some troubled times ahead. Such a scenario allows continued
eventual reversal to 6,420 and a deluxe ticket into the Land of Lower Lows.
If 6,420 makes an appearance, we
shall be presenting a drop target below such a level at 5,850 points. If broken,
secondary calculates at a bottom (hopefully) of 5,260 points. Alas, there is an
unfortunate aspect to such a level which allows calculation of a 3rd level. It’s
a market bottom, ultimately, at 3,655. Rather scary to note this is marginally
higher than the low of 2009.
In summary, it’s early days, despite
how utterly foul the last few sessions have proven. Perhaps it’s also worth
noting drops this severe can also reverse with similar strength, if conditions
prove to change. As winter draws to a close, it’s easy to suspect (hope) a
respiratory virus shall find it difficult to sustain dominance of headlines?
Near term, for the FTSE for FRIDAY,
we shall be watching Japan through the night, hoping it ends positive. If it
does, this will send a pretty strong signal Europe and the US should expect a
respite on Friday. Near term, above 6,848 points is supposed to bring recovery
to an initial 6,924 points. If exceeded, secondary works out at 6,964 points
though, realistically, any positive sentiment could easily drive the market
toward 7,106 points. If triggered, the tightest stop needs be just under
Thursdays low of 6729 points.
Alternately, weakness now below 6729
allows reversal to an initial 6,580. If broken, secondary is at 6,455.
