ASX200: The Long And Short Of It | NAN, GXY, REA, BPT
Matt Simpson November 21, 2019 4:46 AM
A look at long and short opportunities within the ASX200 we're currently tracking.
- Consumer stocks (staples and discretionary) are the leaders the past 5 sessions and trade just off their record highs.
- All sectors remain in positive territory the past 52-weeks
- However, its been the worst two sessions for the ASX200 since the first week of October and the week is on track for a bearish outside candle. Given this occurred after failing to hold above resistance warns there could be further downside as the bull-trap plays out.
Nanosonic CFD/DFT (NAN): This healthcare stock remains in tip top shape and trade just beneath its record highs. Since the prior analysis, the Doji marked a higher low ahead of its run towards (and break to) record highs.
Price action is now coiling above key support and holding above the 10-day eMA, to show momentum remains strong overall.
- The bias is for a bullish break out of compression and for prior resistance around 7.10/16 to hold as support.
- However, we could also look for the bullish trendline to act as support if a deeper retracement materialises.
- As we’re at record high, an open upside target could be considered. Alternatively, bulls could target the monthly R and R3 pivot levels around 7.85 and 8.50 respectively (keep in mind thee levels will be revised from December).
- Conversely, a break of the bullish trendline could provide bears with a countertrend move towards 6.50.
Galaxy Resources CFD/DFT (GXY): We first flagged this stock on the 8th of October for its short potential. As it was trading near its lows after a bearish breakdown, we wanted it to retrace towards the resistance zone before heading lower. Since it traded above the invalidation point, it made its way to the backburner.
Since then, prices have respected a bearish trendline and produced a pattern reminiscent to a triple top. Moreover, today’s price action has broken beneath key support and today’s high was capped by the 20-day eMA.
- Bias remains bearish below 1.115, although traders can also use the bearish channel to confirm an invalidation point.
- The triple top projects an initial target near the 0.875 lows.
- There’s room to move to 0.815/30 but we’d expect profit taking / retracement around such levels.
REA Group Ltd CFD/DFT: A simple counter-trend swing trade could be taking shape. Whilst technically within an uptrend, its retracements can be deep and we’ve now seen a pullback into a cluster of resistance, comprising of a swing low and Fibonacci levels. Yesterday’s small Doji followed by an elongated bearish candle today has formed an evening star reversal pattern at the said resistance zone.
- Bears could look to fade into minor rallies below 104.85 and target the 200-day eMA around 97.
- A break above 106 invalidates the near-term bearish bias and raises the potential for it having returned to its dominant, bullish trend.
Beach Energy CFD/DFT: We’re keeping a close eye on how prices respond around 2.26. Whilst its within a longer-term uptrend (even if the major swings are far and wide) over the near-term, a break below 2.26 could see prices target the 200-day eMA around 2.14. Yet if prices rebound from support, it could try to revert to its longer-term bullish trend.
Price Action Update
Graincorp CFD/DFT: We highlighted the importance of an 8-year support level the stock had failed to break multiple times, and its potential to bounce higher. Since the prior analysis prices have rallied over 14% and, if prior rebounds are anything to go by, could reach the 2035% bracket. Of course, the main issue from here is finding a low volatility entry but take note that current price action shows a bullish engulfing candle following a spinning to (so perhaps preparing for its next leg higher). But, if nothing else, this rebound demonstrates the potential for explosive moves around historical support and resistance levels.
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.