by Gabriel Andre on September 17, 2008
After the Dow Jones yesterday, we have a look at the S&P/ASX 200 index today. The overall configuration is broadly speaking quite similar.
Where goes the investable benchmark for the Australian equity market? After 4 years and a half of continuous rise between March 2003 and November 2007, the index has now retraced 50% of this bullish trend.
The coming weeks should be particularly sensitive as the global equity markets are on the edge (lows of the year, 50% retracement of the 2003/2007 bullish trend…). The news from Wall Street about potential new collapses will keep investors nervous and anxious therefore markets will remain volatile. Large swings and strong rebounds and pull backs may be expected on the near-term.
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by Gabriel Andre on August 21, 2008
In November 2006 it was trading at a price of $0.26. It then traded for three weeks in a sideways pattern before the stock started a long-term bullish trend that drove the price from below $0.30 to a high above $2.20 (points A and B on the chart) in early November 2007. That is a rise of 650% in less than a year!
Since this high posted last year, the stock has retraced a large part of this initial massive gain. As the historical prices data are recent, the shape of the chart appears to be obvious for traders. So far, the price action has not been too complicated to analyse. The initial bullish trend was clear, so is the corrective price action.
Thus the market sold back the stock towards the Fibonacci retracement ratios of the first one-year rise. The first significant pull back drove the price on the 38.2% level (point C), then on the 50% level, and eventually to the 61.8% (point E).
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