Samsung’s Breakaway Gap – The Beginning Of Something Larger?
Matt Simpson September 19, 2019 8:59 PM
Starting on the weekly chart, Samsung enjoyed a strong bullish run throughout most of 2016 to 2018, before embarking on a 15-month correction. Coming in three distinct waves, the ABC retracement appears to have terminated at 36,850 having found support at the 200-week MA in December and bullish momentum is now back in control.
Two higher lows have formed as part of an inverted head and shoulders pattern which, if successful, projects an initial target just above the 2018 highs. This week’s breakout has confirmed the bullish reversal pattern, although if we have indeed seen the end of the 15-month ABC correction, it should be breaking to record highs over the coming months. And assuming the head is the end of wave 2 retracement, this week’s breakout assumes we’re now in a iii or 3 wave.
Switching to the daily chart shows just how strong bullish momentum is. A small bullish hammer shows a minor pullback to 46,400 ahead of a daily close above 47,750 which confirmed the head and shoulders reversal. However, a breakaway gap on above-average volume saw prices explode higher to close above 49,000 yesterday and today’s price action has also gapped higher. Granted, we could find interim resistance around 50k but, given the strength of the breakout, we don’t envisage yesterday’s gap to be filled.
- Samsung could be suitable to intraday momentum traders, or bulls who prefer to buy dips on the daily chart. Look for 48,450 to hold as support on the daily chart (or a higher low form above this key level if resistance is found around 50k).
- Alternatively, intraday traders could seek bullish positions to try and ride the current momentum ahead of 50k.
- The near-term bullish bias is invalidated with a break below 48,450
- The bullish daily trend remains valid above 46,400 (although a test of this level would invalidate the head and shoulders pattern)
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.