#FTSE #Japan Given it’s ‘amateur dramatic week’ for the price of Crude, a few emails reminded it’s worth a glance at Shell’s future price potentials. When we last reviewed them (link) we provided a scenario for 17 quid or less. Obviously, the share price has fully embraced these potentials, relaxing severely but curiously, there is an argument for a rebound.
Recovery anytime soon above above
1493p should prove useful, calculating with an initial price target at 1567p.
Oddly (for us), despite this movement potential being rather trivial in the
grand scheme of things, it’s a scenario we’re pretty comfortable with. Things
become a bit more vague above 1567p as our secondary target works out at 1758p.
Presently, all the secondary does is give hope for an attempt at the immediate
downtrend (Blue). Only with price closure above this line dare we express
sentiment of “proper” share price recovery commencing as we’re able to give 2239
as a third level target.
At time of writing, Shell are trading
at 1371p and we’d now be inclined to alarm, if any excuse is found to drill down
below 1243p. Movement such as this is liable to trigger reversal to an initial
1094p with secondary, if broken, down at 834p. Visually, the secondary
calculation is absurd but unfortunately, so was our calculation yesterday which
provided a drop target for Brent at 15 dollars.
Sometimes numbers, like politicians
salaries, can be absurd. And unlike politicians salaries, they don’t have to be
wrong.
#Gold #SP500 The markets are producing movements never before experienced. We’re more than a little concerned as despite any possible near term rebound, an awful lot of triggers were demolished which permit further weakness into the realms of doom. Brent proved a case in point. Our last report had $39 as “bottom”, a number which was ignored when the market gapped the price down at the open of trade, the day starting at 37.5 dollars before trading even commenced.
Equally, Gold is supposed to be a
defensive commodity, we’d guess the metals density making it useful to hit
anyone suspected of carrying Covid-19. Gold, thus far, has avoided making
serious panic gains above the 1700 level. Perhaps Toilet Paper shall prove to be
the new Gold, if panic buying is a reliable indicator!
The price of Brent is a certain concern, gapped down to open the week at 37.50 dollars. Usually we’re able to back test this sort of thing in an attempt to find a trend we’d previously missed. Unfortunately, on the occasion, we’re far from comfortable. Crude dropped further than we’d normally expect, now residing in a region with some pretty dire drop potentials.
Just over 4 years ago, Brent hit a
market bottom at 27.8 dollars, a number we’d first mooted when it was trading at
107. And to be honest, while we mentioned the potential, we also ridiculed it,
thinking the potential highly improbable. This time, we’re not being as
cautious!
The situation now calculates with weakness below 31 dollars allowing reversal to an initial 25 dollars. If (or doubtless, when) broken, our secondary works out at a bottom of 15 dollars. We believe, if 15 dollars ever makes an appearance, Brent must bounce. Several reasons support such a theory. Firstly, since 2016, three quite distinct scenario now allow an eventual bottom of 15 dollars. Secondly, we cannot calculate anything below such a level.
Shown on the chart below is the immediate downtrend, suggesting the product price needs almost double to 60 dollars to rejoin prior trends.
Perhaps of greater concern should be the proposed target levels, each below the markets prior disaster level of 27.8 dollars. The implicit suggestion therefore is the best we can hope is an entirely new trend shall develop in the future, one which will find difficulty taking the product to prior levels.
Unless, of course, something happens
in the world and proves able to change the perception of “demand” for crude oil.
We’ve not bothered writing "success" against each index.
While all drop targets were achieved, it was due to the markets being gapped
down at the open. This sort of thing never feels like a win.
#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!
