1/ An Upcoming CPU Boost?
2/ Insurance Down Under
3/ Singapore Versus the World
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1/
An Upcoming CPU Boost?
Computershare Limited (technology services sector in Australia – stock code CPU), has been in an uptrend from its March 2020 low to its late 2022 high, followed by a sideways drift. This price consolidation is about to complete a 2 year ascending triangle formation which normally carries a bullish connotation. A projected target of AUD 39.50 can be calculated by taking the height of the triangle at its widest spread and adding it to the breakout area.
It is worth noting that the price has yet to lift through this resistance area (i.e., the top of its ascending triangle around AUD 28.50). As long as the price stays below that level, it is still in consolidation… But as and when this breakout happens, we have a plan, with a defined risk and reward. Definitely one to keep on the watchlist.
2/
Insurance Down Under
Suncorp Group Limited (finance/insurance sector in Australia – stock code SUN), has been in a price recovery mode since its impressive October 2006 to March 2009 decline. To help identify important technical levels of support and resistance within that range, Technical Analysts frequently use the Fibonacci retracements. These calculated levels then act as resistance on the way up and once the price surpasses them, they then act as support levels.
Back in June, Suncorp was able to move above the 61.8% Fibonacci retracement of the October 2006 to March 2009 decline, which is a positive technical input in the price chart, as the breakout suggests that the stock could rally back to the 2006 highs at AUD 23.52, i.e., a complete retracement of the decline, notwithstanding interim pullbacks.
3/
Singapore Versus the World
Using a relative-strength chart, is a simple yet very effective way to compare one asset to another. For this type of ratio analysis, a line chart is used instead of candlesticks or bar chart. Here, we compare the iShares MSCI Singapore ETF ($EWS) against the iShares MSCI All Country World Index ETF ($ACWI).
$EWS outperformed $ACWI from October 2008 until August 2010, and again from January 2017 to April 2018. Both periods were followed by steep downtrends. The ratio is currently at the downtrend-line resistance tested in 2019 as well as 2023. If the ratio can get above that level, meaning that $EWS starts a new period of outperformance, then the next step would be to look at $EWS holdings and find those individual stocks with a nice uptrend and/or a bullish setup.
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Originally posted 11th September 2024
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