Deciphering Divergent Signals The Complex Economic LandscapeThe global economy continues to face profound uncertainties in the wake of COVID-19's massive disruptions. For policymakers and business leaders, making sense of divergent signals on jobs, inflation, and growth remains imperative yet challenging.
In the United States, inflation pressures appear to be moderately easing after surging to 40-year highs in 2022. The annual Consumer Price Index (CPI) declined to 3% in June from the prior peak of 9.1%. Plunging gasoline and used car prices provided some consumer relief, while housing and food costs remained worryingly elevated. Core CPI, excluding food and energy, dipped to 4.8% but persists well above the Fed’s 2% target.
Supply chain improvements, waning pandemic demand spikes, and the strong dollar making imports cheaper all helped cool inflation. However, risks abound that high prices become entrenched with tight labor markets still buoying wages. Major central banks responded with substantial interest rate hikes to reduce demand, but the full economic drag likely remains unseen. Further supply shocks from geopolitics or weather could also reignite commodity inflation. While the direction seems promising, the Fed vows ongoing vigilance and further tightening until inflation durably falls to acceptable levels. The path back to price stability will be bumpy.
Yet even amidst surging inflation, the US labor market showed resilience through 2022. Employers added over 4 million jobs, driving unemployment down to 3.5%, matching pre-pandemic lows. This simultaneous inflation and job growth confounds historical norms where Fed tightening swiftly slows hiring.
Pandemic-era stimulus and savings initially cushioned households from rate hikes, sustaining consumer demand. Early retirements, long COVID disabilities, caregiving needs, and possibly a cultural rethinking of work also constricted labor supply. With fewer jobseekers available, businesses retained and attracted talent by lifting pay, leading to nominal wage growth even outpacing inflation for some months.
However, the labor market's anomalous buoyancy shows growing fragility. Job openings plunged over 20% since March, tech and housing layoffs multiplied, and wage growth decelerated – all signals of softening demand as higher rates bite. Most economists expect outright job losses in coming months as the Fed induces a deliberate recession to conquer inflation.
Outside the US, other economies show similar labor market resilience assisted by generous pandemic supports. But with emergency stimulus now depleted, Europe especially looks vulnerable. Energy and food inflation strain household budgets as rising rates threaten economies already flirting with recession. Surveys show consumer confidence nosediving across European markets. With less policy space, job losses may mount faster overseas if slowdowns worsen.
Meanwhile, Mexico’s economy and currency proved surprisingly robust. Peso strength reflects Mexico’s expanding manufacturing exports, especially autos, amid US attempts to nearshore production and diversify from China reliance. Remittances from Mexican immigrants also reached new highs, supporting domestic demand. However, complex immigration issues continue challenging US-Mexico ties.
The pandemic undoubtedly accelerated pre-existing workforce transformations. Millions older employees permanently retired. Younger cohorts increasingly spurn traditional career ladders, cobbling together gig work and passion projects. Remote technology facilitated this cultural shift toward customized careers and lifestyle priorities.
Many posit these preferences will now permanently reshape labor markets. Employers clinging to old norms of in-office inflexibility may struggle to hire and retain talent, especially younger workers. Tighter immigration restrictions also constrain domestic labor supply. At the same time, automation and artificial intelligence will transform productivity and skills demands.
In this context, labor shortages could linger regardless of economic cycles. If realized, productivity enhancements from technology could support growth with fewer workers. But displacement risks require better policies around skills retraining, portable benefits, and income supports. Individuals must continually gain new capabilities to stay relevant. The days of lifelong stable employer relationships appear gone.
For policymakers, balancing inflation control and labor health presents acute challenges. Achieving a soft landing that curtails price spikes without triggering mass unemployment hardly looks guaranteed. The Fed’s rapid tightening applies tremendous pressure to an economy still experiencing profound demographic, technological, and cultural realignments.
With less room for stimulus, other central banks face even more daunting dilemmas. Premature efforts to rein in inflation could induce deep recessions and lasting scars. But failure to act also risks runaway prices that erode living standards and stability. There are no easy solutions with both scenarios carrying grave consequences.
For business leaders, adjusting to emerging realities in workforce priorities and automation capabilities remains imperative. Companies that embrace flexible work options, prioritize pay equity, and intelligently integrate technologies will gain a competitive edge in accessing skills and talent. But transitions will inevitably be turbulent.
On the whole, the global economy's trajectory looks cloudy. While the inflation fever appears to be modestly breaking, risks of resurgence remain as long as labor markets show tightness. But just as rising prices moderate, the delayed impacts from massive rate hikes threaten to extinguish job growth and demand. For workers, maintaining adaptability and skills development is mandatory to navigate gathering storms. Any Coming downturn may well play out differently than past recessions due to demographic shifts, cultural evolution, and automation. But with debt levels still stretched thin across sectors, the turbulence could yet prove intense. The path forward promises to be volatile and uneven amidst the lingering pandemic aftershocks. Navigating uncertainty remains imperative but challenging.
Globalmarket
GOLD SHORT I will keep utilizing Selling every Top's strategy (for #3-Month fractal now) as my Selling order engaged on Friday's session is still active (#1,958.80 entry point) as it is very important that market closed below #1,957.80 sequence. DX is my main chart for now and look for pointers there prior to positioning. #1,942.80 is my first Target and #1,940 is my second Target
THE DXY WILL DETERMINE THE EUR/USD NEXT MOVEFollowing this concept is very easy if you are a WAVES TRADER. DXY is at the final correction of AB. What we should be waiting and looking for is WAVE C to start building up in order to continue the bearish movement for EUR/USD to move in the opposite direction.
Good luck
AUD/JPY SELL LOADING UP WATCHFirst, if you find this idea helpful kindly like and leave a comment don't also forget to follow us
AUDJPY is still looking for the final completion of the WAVE X correction before the bearish impulse move will starts. Traders should look for a way to follow the bear moves after the completion of the WAVE X correction and join the WAVE Y to the downside
LOW WCA - Ascending TriangleCompany: Lowe's Companies, Inc.
Ticker: LOW
Exchange: New York Stock Exchange (NYSE)
Sector: Consumer Discretionary
Introduction:
In today's technical analysis, we're focusing on Lowe's Companies, Inc. (LOW), a prominent player in the Consumer Discretionary sector listed on the New York Stock Exchange. Lowe's weekly chart is currently showcasing an Ascending Triangle pattern, indicative of a potential bullish reversal.
Ascending Triangle Pattern:
An Ascending Triangle pattern typically emerges during periods of consolidation and is often considered a bullish indicator. The pattern is characterized by a flat upper trendline (resistance) and an ascending lower trendline (support), both of which converge as the pattern matures.
Analysis:
Previously, Lowe's was in a noticeable downtrend, as indicated by the blue diagonal resistance line. However, over the last 420 days, Lowe's stock price has consolidated, forming an Ascending Triangle pattern. This pattern is considered to act as a bullish reversal indicator.
The Ascending Triangle's upper horizontal boundary lies at $221, boasting three touchpoints, while the upward sloping lower boundary also shows three touchpoints. The symmetry of these touchpoints lends credibility to the Ascending Triangle pattern.
Should we observe a breakout above the Ascending Triangle, we can anticipate a potential price target of $270. This implies a potential opportunity for a 22% price increase from the breakout level.
Conclusion:
This analysis suggests that Lowe's Companies, Inc. may be primed for a bullish reversal, representing potential investment opportunities.
As always, it's essential to validate this technical analysis with other indicators, market trends, and relevant news for comprehensive investment decisions. Not financial advice.
If you found this analysis helpful, please consider liking, sharing, and following for more insights. Wishing you profitable trading!
Best regards,
Karim Subhieh
Bio-Techne Corp WCA - Rectangle Company: Bio-Techne Corp
Ticker: TECH
Exchange: NASDAQ
Sector: Healthcare
Introduction:
Today, we are looking at Bio-Techne Corp (TECH) on the weekly chart. Bio-Techne is a prominent name in the Healthcare sector and is traded on the NASDAQ exchange. Currently, the stock exhibits a Rectangle pattern that could signal a potential shift in the stock's direction.
Rectangle Pattern:
A Rectangle pattern typically manifests during a consolidation phase and is recognized by price movements that tend to bounce between horizontal support and resistance lines, forming a rectangular shape.
Analysis:
In the past, Bio-Techne Corp's stock price trended downward. However, this trend appears to have been interrupted by a consolidation zone characterized by a Rectangle pattern. The upper boundary of the pattern is positioned at $87.50, having been tested four times. The lower boundary stands at $70, having been touched twice.
Interestingly, the price is again using the 200 EMA as a support, indicating the potential for a bullish shift. It seems that the stock might be gearing up for another attempt to test the upper boundary.
If a breakout occurs above this resistance level, we could anticipate a price target of $105, representing a potential increase of around 20%.
Conclusion:
The technical setup on Bio-Techne Corp's weekly chart showcases a Rectangle pattern, suggesting a potential consolidation period before the next significant price move. Traders should keep this stock on their watchlist, especially in anticipation of a breakout above the upper boundary.
Remember, this analysis is intended to be used as part of your wider market research and risk management strategy and should not be considered as direct trading advice.
As always, happy trading, and stay tuned for more analysis!
Best Regards,
Karim Subhieh
Samsung SECU DCA - RectangleCompany: Samsung SECU
Ticker: 018260
Exchange: Korea Exchange (KRX)
Sector: Technology
Introduction:
Welcome to today's technical analysis. We're turning our focus to Samsung SECU, analyzing its daily scale chart on the Korea Exchange (KRX). The price action suggests a well-defined rectangle pattern formation, which, coupled with the bullish market sentiment reflected in the KOSPI Composite Index, presents an interesting setup.
Rectangle Pattern:
A rectangle pattern is a trend continuation pattern formed when the price oscillates between parallel support and resistance levels. The breakout direction indicates the trend direction.
Analysis:
Samsung SECU's price has been moving within a clearly defined range, forming a Rectangle pattern. The upper boundary of this Rectangle is at 36000 KRW, while the lower boundary is at 30150 KRW. With four touch points at both boundaries, the fourth at the upper boundary has already signaled a breakout.
Additionally, the price is above the 200 EMA, indicating a bullish market environment. As a result, a long position becomes a favorable consideration.
Our projected price target post-breakout is set at 41850 KRW, translating into a potential price rise of approximately 16.27%.
Conclusion:
Samsung SECU's daily chart presents a compelling scenario, with a clear Rectangle pattern and a recent breakout. Given the bullish sentiment in the overall market, as indicated by the rising KOSPI Composite Index, long positions currently seem favorable.
As always, remember that this analysis does not constitute financial advice. Conduct your own research and consider risk management strategies before making any investment decisions.
If you found this analysis helpful, please like, share, and follow for more insights. Happy trading!
Best regards,
Karim Subhieh
CMCSA DCA - Cup and HandleCompany: Comcast Corporation
Ticker: CMCSA
Exchange: NASDAQ
Sector: Communication Services
Introduction:
Greetings, and welcome to today's technical analysis. We're focusing on the daily chart of Comcast Corporation (CMCSA), highlighting a bullish reversal pattern known as a cup and handle that has formed over 294 days.
Cup and Handle Pattern:
The cup and handle pattern is often a bullish continuation or a bullish reversal signal and is characterized by a 'U' shape (the cup) followed by a smaller, downward drift (the handle). The formation is complete when the asset's price breaks above the resistance line marking the top of the handle.
Analysis:
Comcast Corporation's price was previously in a downtrend, denoted by the blue diagonal resistance line. This downward movement appears to have been interrupted by the cup and handle pattern. The horizontal resistance line of this pattern is located at $40.94, with the price currently having a second breakthrough.
Notably, the 200 EMA is above the price, suggesting a bullish market environment.
Upon a successful breakout, the projected price target is $53.50, offering a potential rise of 30.70%. Therefore, a long position might be considered.
Conclusion:
The daily chart of Comcast Corporation presents an interesting scenario, with the formation of a cup and handle pattern suggesting a potential bullish reversal. With the successful breakout above the pattern's resistance this presents an opportunity for a long position.
As always, please bear in mind this analysis does not constitute financial advice. It's vital to conduct your own research and consider risk management strategies when investing.
If you found this analysis insightful, please like, share, and follow for more updates. Happy trading!
Best regards,
Karim Subhieh
Fujitsu Limited WCA - Symmetrical TriangleCompany: Fujitsu Limited
Ticker: 6702.T
Exchange: Tokyo Stock Exchange
Sector: Technology
Introduction:
Hello and welcome to our technical analysis session! Today we are focusing on Fujitsu Limited as observed on the weekly chart on the Tokyo Stock Exchange. An intriguing symmetrical triangle formation has caught our attention, which may act as a bullish continuation.
Symmetrical Triangle Pattern:
A symmetrical triangle is a price pattern characterized by converging trend lines and oscillating price within the pattern. It can serve as a continuation or a reversal signal. The breakout direction tends to predict the subsequent trend direction.
Analysis:
Preceding this consolidation phase, Fujitsu's price exhibited a clear uptrend. The ongoing consolidation phase, shaped as a symmetrical triangle, has been forming for 616 days. There are three points of contact with the triangle's upper boundary and two with its lower boundary.
Notably, this consolidation phase takes place above the 200 EMA, indicating a bullish environment. If we see a weekly candlestick close above 18400, it could serve as an opportune moment for a long position entry.
Assuming a valid breakout, our projected price target is at 26025, translating into a potential price rise of approximately 41.33%.
Conclusion:
The weekly chart of Fujitsu Limited presents a potential bullish continuation pattern in the form of a symmetrical triangle. A confirmed breakout above the triangle's upper boundary could offer a promising long position entry.
As always, please perform your own due diligence and consider appropriate risk management strategies when investing. Not financial advice!
Thank you for joining this analysis. If you found it useful, please like, share, and follow for more insightful market updates. Happy trading!
Best regards,
Karim Subhieh
Mitsubishi Heavy Industries WCA - Rectangle PatternCompany: Mitsubishi Heavy Industries
Ticker: 7011
Exchange: Tokyo Stock Exchange
Sector: Industrial
Introduction:
Hello and welcome to this week's technical analysis. We're focusing on Mitsubishi Heavy Industries, as represented on the weekly chart of the Tokyo Stock Exchange. The company's stock has formed an interesting rectangle pattern over the past 378 days, acting as a potential bullish continuation.
Rectangle Pattern:
A Rectangle pattern can act as a continuation or reversal signal, formed when price oscillates between two parallel lines—support and resistance. The eventual breakout direction might determine the continuation or reversal of the current trend.
Analysis:
Previously, Mitsubishi Heavy Industries' price has been on an upward trend, and this Rectangle pattern might signal a bullish continuation. The price has been moving within two clearly defined boundaries—upper at 5650 and lower at 4476. Both these boundaries have experienced two touch points each.
Significantly, this consolidation is occurring above the 200 EMA. Presently, we have seen a fresh breakout above the upper boundary, and we're patiently awaiting the weekly candle's close to plan a potential long entry.
Assuming the breakout is valid, our projected price target is at 6826, indicating a potential price rise of about 20.74%.
Conclusion:
The weekly chart of Mitsubishi Heavy Industries presents a possible bullish continuation pattern in the form of a Rectangle. A confirmed breakout above the upper boundary could offer a promising long entry opportunity.
As always, conduct your own research and consider appropriate risk management strategies when investing.
Thank you for joining this analysis session. If you found it valuable, please like, share, and follow for more market insights. Happy trading!
Best regards,
Karim Subhieh
MSCI World Index Fund WCA - Possible INV H&SIndex: MSCI World Index Fund
Introduction:
Hello everyone! Today, we are looking at the MSCI World Index Fund to gain a broader perspective on the global equity market environment. Based on our current analysis, we can see the formation of a classic technical pattern, signaling a potential reversal from the preceding downtrend.
Analysis:
Over the past 371 days, the index has seemingly been forming an inverted head and shoulders pattern, a well-known reversal pattern suggesting a change from a downtrend to an uptrend. The horizontal neckline of this pattern lies at 120$. While the symmetry between the shoulders isn't perfect, it's worth noting that when the right shoulder is slightly higher than the left one, this is often seen as a bullish sign.
Furthermore, the right shoulder has formed distinctly above the 200 EMA, adding weight to the potential bullish reversal. Currently, the price appears to have broken out above the neckline, paving the way for a calculation of a possible price target upon the successful closing of the weekly candle. However, it's crucial to remember that the weekly candle must close above the neckline; otherwise, we could be dealing with a premature breakout.
Assuming a valid breakout, our calculated price target would be 142, equating to a potential price increase of approximately 18.5%. This provides a favorable opportunity to explore long setups in general.
Conclusion:
The MSCI World Index Fund's technical analysis points to a potentially bullish reversal. Should the current breakout confirm, the ensuing uptrend could present opportunities for investors looking for long positions.
As always, remember to conduct your own due diligence and implement appropriate risk management strategies when investing.
Thank you for tuning into this analysis. Please like, share, and follow for more insights into the market. Happy trading!
Best regards,
Karim Subhieh
Micron Technology (MU) DCA - Rectangle Pattern Company: Micron Technology
Ticker: MU
Exchange: NASDAQ
Sector: Technology
Introduction:
Hello, and thank you for joining me for this technical analysis. Today, we will take a close look at Micron Technology (MU), specifically focusing on a Rectangle pattern that has formed on the daily chart.
Rectangle Pattern:
The Rectangle pattern is a period of consolidation, often following a significant price move, where the price bounces between horizontal support and resistance levels. This pattern can act as either a continuation or a reversal pattern, depending on the breakout direction.
Analysis:
Over the past 355 days, MU's price has been oscillating between an upper boundary at $64.37 and a lower boundary at $48.61, forming a clear Rectangle pattern. We can identify six touch points at the upper boundary and two at the lower boundary, indicating that the price is consolidating within this range.
Currently, the price appears to be attempting a breakout above the upper boundary, which could present a long entry opportunity if successful. Furthermore, the price is positioned above the 200 EMA, suggesting a bullish market environment.
If the breakout is confirmed, the price target would be $80, representing a potential gain of approximately 24%.
Conclusion:
In conclusion, Micron Technology's daily chart shows a well-defined Rectangle pattern, signaling a period of consolidation. A breakout above the upper boundary could present a lucrative trading opportunity. As always, it's crucial to manage risk effectively and ensure your trading decisions align with your overall investment strategy.
Please note that this analysis does not constitute financial advice. Always conduct your own research before making investment decisions.
If you found this analysis helpful, please like, share, and follow for more updates. Happy trading!
Best regards,
Karim Subhieh
LRCX WCA - Inverted head and shoulders Company: Lam Research Corporation
Ticker: LRCX
Exchange: NASDAQ
Sector: Technology
Introduction:
Greetings, and welcome to today's technical analysis of Lam Research Corporation (LRCX) on the NASDAQ. We're focusing on a 13-month-old inverted head and shoulders pattern, suggesting a potential bullish breakout.
Inverted Head and Shoulders:
The Inverted Head and Shoulders pattern is a classic reversal signal. It's formed by a left shoulder, a head, and a right shoulder, with the head being the lowest point. The neckline connects the high points of the pattern, acting as a resistance level. A breakout above the neckline signals a potential bullish reversal.
Analysis:
On the weekly chart of LRCX, we can observe a well-formed inverted head and shoulders pattern. The neckline, which also acts as our resistance, sits at 536. Both shoulders of the pattern are extended, with the right shoulder characterized by a mini-consolidation in the form of an ascending triangle. This ascending triangle is consolidating very close to the neckline, indicating increasing bullish pressure.
The price is trending above the 200 EMA, further supporting the bullish bias. A breakout above the neckline would open up the potential for significant upside.
Conclusion:
If this neckline is breached, we have a potential price target of 762, representing a 43% rise from the neckline. As always, it's crucial to use risk management and proper position sizing in your trading strategy.
Please note that this analysis is not financial advice. Always conduct your own due diligence before trading or investing.
If you found this analysis helpful, please like, share, and follow for more updates. Happy trading!
Best regards,
Karim Subhieh
AUD/USD still on shortFirst, if you found this helpful please like and leave a comment in the comment section for more discussion, and don't also forget to follow for more updates
AUD/USD still needs to complete the bearish correction before the bull starts another impulse moves. To me, we should be expecting a bearish impulse throughout next week to complete WAVE C. Goodluck
9202 - Bullish ReversalCompany: ANA Holdings Inc.
Ticker: 9202
Exchange: TSE
Sector: Air Transport
Introduction:
Hello and welcome to today's technical analysis. We're turning our attention to the weekly chart of ANA Holdings Inc. (9202) on the TSE, which is demonstrating an exciting Rectangle pattern breakout that could signal a bullish reversal.
Rectangle Pattern:
The Rectangle pattern is a common chart pattern that can act as a continuation or a reversal signal, depending on the preceding trend and the breakout's direction. In this case, the Rectangle pattern is acting as a bullish reversal signal.
Analysis:
Over the past 1155 days, ANA Holdings' price movements have formed a distinct Rectangle pattern. The clear touch points and boundaries define the pattern, with the lower boundary at 2117.5 and the upper boundary at 2989.
The price has successfully moved above the 200 EMA, and for the first time in 1155 days, we've seen a clear breakout above the upper boundary of the Rectangle. This is a strong bullish signal, suggesting a potential trend reversal.
Conclusion:
The price target following this breakout is set at 3853, representing a potential rise of 29%. As always, it's crucial to employ risk management strategies and appropriate position sizing when trading based on chart patterns.
Please remember that this analysis should not be taken as financial advice. Always perform your own due diligence before trading or investing.
If you found this analysis helpful, please consider liking, sharing, and following for more. Happy trading!
Best regards,
Karim Subhieh
💥 WORLD ECONOMY: ...big drop is coming? 😡Amazon rarely delays deliveries, but I ordered the crystal ball over 30 years ago and it still hasn't arrived! 😢😂 ...So, I don't know what will really happen in the coming months, but what we can do right now is try to make some considerations.
The chart above represents the DJ Transportation Index , an excellent "thermometer" of US economy. If we look at a monthly time frame, we see that a deep pullback appeared after a structure with "Wave 1 Extension", so we cannot exclude that it could happen again. At the same time however, we see that the Price Action has reached an important static support around 14,000, and only its failure could confirm a bearish leg with a first target around 11,000, obviously we are talking about a monthly chart, so to confirm this hypothesis, we have to wait until the end of the month.
In this historical context, many things could change in global economy, and the geopolitical situation is one of the main actors of this period. Inflation, the war in Ukraine, wide social gap, the dollar crisis, are all key factors that could still lead to uncertainty in the medium term.
INFLATION and THE PRICE WAR
We are well aware that a large part of the developed economy is struggling with rising prices, and even if inflation in the U.S. and in Europe it is driven by different reasons, Central Banks are using the same tools (are they wrong??) of monetary policy, , but something could change in the coming months. The most important Central Bank (Federal Reserve) could face a diabolical "pincer", because the danger of hyperinflation is the same as a potential stagflation.
Thanks for your attention.
A.B. ❤
Marsh & McLennan Companies (MMC) Weekly Chart AnalysisCompany: Marsh & McLennan Companies
Ticker: MMC
Exchange: NYSE
Sector: Financial Services
Introduction:
Hello and thank you for taking the time to read my post. Today, we analyze the Marsh & McLennan Companies (MMC) chart on the weekly scale, focusing on a classic price pattern called the "Rectangle Pattern." Marsh & McLennan Companies is a global professional services firm operating in the financial services sector, traded on the NYSE under the ticker MMC.
Classic Rectangle Pattern:
The classic rectangle pattern is a chart pattern formed when the price of an asset moves between two parallel horizontal lines, representing support and resistance levels, over a period of time. In essence, it reflects a consolidation phase where the market is undecided about the direction of the trend.
Analysis:
In the case of MMC, we find a textbook example of a rectangular formation, with several points of contact to the upper and lower boundary. The resistance was at 177.32 and the support at 146.73. The price pattern has formed for 497 days, and now, for the first time, a weekly candle has closed above the resistance level of 177.32. The price is currently retesting the resistance as support, which provides an ideal entry opportunity. The price is clearly above the 200 EMA, implying a bullish environment.
Additional Analysis:
With the breakout above the resistance level, we should closely monitor MMC's price action for confirmation that the breakout is genuine and not a false breakout. A successful retest of the 177.32 level as support could signify that the breakout is valid, and we may expect the price to move towards the target at 203.53, which represents a ~15% price increase.
Conclusion:
The Marsh & McLennan Companies (MMC) weekly chart showcases a classic Rectangle Pattern, reflecting a consolidation phase in the market. A breakout above the resistance level and a successful retest as support indicate a bullish scenario. By closely monitoring the price action and support and resistance levels, traders can be better prepared for any potential price action in the future. As always, it's essential to consider risk management and proper position sizing when trading based on chart patterns.
Please note that this analysis is not financial advice. Always do your own due diligence when investing or trading.
If you found this analysis helpful, please like, share, and follow for more updates. Happy trading!
Best regards,
Karim Subhieh
SSE Composite Index WCA - Classic Rectangle Introduction:
Hello and thank you for taking the time to read my post. Today, we analyze the SSE Composite Index on the weekly scale, focusing on a classic price pattern called the "Rectangle Pattern." The SSE Composite Index is the most important stock index in China, excluding Hong Kong. It is a price index weighted by market capitalization and includes all public companies listed on the Shanghai Stock Exchange. The index is published by the China Securities Index Company. Analyzing an index helps enormously with top-down approaches, as it provides a broader perspective of the market and allows investors to gauge the overall sentiment before diving into individual stocks.
Rectangle Pattern:
The rectangle pattern is a chart pattern formed when the price of an asset moves between two parallel horizontal lines—representing support and resistance levels—over a period of time. In essence, it reflects a consolidation phase where the market is undecided about the direction of the trend.
Remember, this is just a brief introduction to the technical aspects of the rectangle pattern. As you delve deeper into this topic, you'll discover more nuances and practical applications that can enhance your trading strategies.
Additional Analysis:
On the SSE Composite Index chart, we can observe some fascinating insights. The general trend was downward until 25/04/2022, which changed with the formation of a hammer. Since then, the price has been bound within a range, which is depicted as a classic rectangle pattern. This pattern has been forming for 423 days, which is notable because the longer a pattern remains consistent, the higher the probability that the subsequent breakout will be volatile.
The support of the range is at 2890, while the resistance is at 3400. Currently, the price is above the 200 EMA, making a long entry more attractive. We will closely monitor the price pattern and wait for a break above 3400 while examining the sectors or stocks from the SSE Composite Index more closely. The next potential resistance after 3400 would be 3720.
Top-Down Approach Significance:
A top-down approach is a method that investors use to analyze the market, beginning with a broad overview and then narrowing down to individual stocks. This method helps investors identify the overall market sentiment and trends, allowing them to make more informed decisions when selecting stocks within specific sectors or industries. Analyzing the SSE Composite Index, as shown in this post, provides a valuable starting point for investors looking to employ a top-down approach in their decision-making process.
Conclusion:
The SSE Composite Index weekly chart showcases a classic Rectangle Pattern, reflecting a consolidation phase in the market. By closely monitoring the support and resistance levels, as well as the general trend, traders can be better prepared for any potential price action in the future. Utilizing a top-down approach enables investors to gain a broader perspective and make more informed decisions when selecting stocks. As always, it's essential to consider risk management and proper position sizing when trading based on chart patterns.
Please note that this analysis is not financial advice. Always do your own due diligence when investing or trading.
If you found this analysis helpful, please like, share, and follow for more updates. Happy trading!
Best regards,
Karim Subhieh
Hang Seng Index (HSI) WCA - Inverted Head and Shoulders PatternHello and thank you for taking the time to read my post. Today, we analyze the Hang Seng Index (HSI) on the weekly scale, focusing on a classic price pattern called the "Inverted Head and Shoulders Pattern." The Hang Seng Index is the leading stock index in Hong Kong and one of the most important in Asia. It tracks the share prices of the 50 largest and most traded companies on the Hong Kong Stock Exchange, representing about 57% of the total market capitalization on this exchange.
Inverted Head and Shoulders Pattern:
The inverted head and shoulders pattern is a bullish reversal pattern that occurs at the end of a downtrend. It is characterized by three troughs or valleys, with the middle one being the lowest (the head) and the two on either side being relatively higher (the shoulders). The pattern is completed by a horizontal line called the "neckline," which connects the highs of the shoulders. In a nutshell, the formation of the inverted head and shoulders pattern signals a potential reversal from a downtrend to an uptrend.
Remember, this is just a brief introduction to the technical aspects of the inverted head and shoulders pattern. As you delve deeper into this topic, you'll discover more nuances and practical applications that can enhance your trading strategies.
Additional Analysis:
Upon analyzing the HSI weekly chart, we observe a downward trend since 16/02/2021, with the blue diagonal resistance line representing the general trend. As classic chart pattern analysts, our attention is immediately drawn to the textbook example of an inverted head and shoulders pattern, clearly defined with the left shoulder, head, and right shoulder. The symmetry between the shoulders is perfect, and the pattern has been forming for an impressive 491 days. This is noteworthy because the longer a price pattern remains consistent, the more powerful the eventual breakout will be.
We cannot predict when the right shoulder will form and break out, but we can see that the price supports the symmetry line in the form of a bullish engulfing (orange mark). The price is currently still below the 200 EMA, which is another indication that we should continue to watch this price pattern closely and not jump to conclusions. Thus, we patiently await our opportunity.
Conclusion:
The Hang Seng Index (HSI) weekly chart showcases an Inverted Head and Shoulders Pattern, reflecting a potential reversal from a downtrend to an uptrend. By closely monitoring the pattern's intricacies and the market's subtle cues, traders can be better prepared for any potential price action in the future. As always, it's essential to consider risk management and proper position sizing when trading based on chart patterns.
Please note that this analysis is not financial advice. Always do your own due diligence when investing or trading.
If you found this analysis helpful, please like, share, and follow for more updates. Happy trading!
Best regards,