Monday, July 13, 2009

Half-term report: UK stocks for 2009

In January of this year I posted a list of 5 UK stocks for 2009. How have they fared so far this year?

First was HSBC Holdings (HSBA). The bullish wedge I had outlined at the start of the year was decisively broken to the downside - which left the stock in considerable trouble. The stock halved in value, reaching a low of 253.74p. From its low in March the stock recovered back to 583.50p and curently trades at 496p - still well off the then broker targets of 745.85-765.61p. The trendline break-to-watch I had marked in January didn't occur until April at 474p

The second pick, BP (BP.) had a bearish set-up in January but the potential for support at 463p was there for value buyers. But in the events that transpired the bearish break did eventually come but an attempt for support at 464p failed. The stock did find support at 401.33p but the subsequent bounce has the look of a larger consolidation pattern at play. It closed Friday art 461p

For the third pick, Royal Dutch Shell (RDSA) I had made an optimistic call for a test of summer 2008 highs but in the end it was hit like BP, marking a low in March. Unlike BP this has reached (and has so far bounced from) consolidation support. Should this reverse lower then expect it to lead BP lower:

Fourth was Vodafone (VOD). The latter part of 2008 had shaped into an early rally but like the broader market this rally was quickly cut short in 2009. Since March lows the stock has formed a triangle consolidation that some may view as a bullish wedge (i.e. buy break of resistance for a potential move to 145p) or a bearish descending triangle (i.e. sell break of support ~112p for a target of ~96p). Hunch favors the latter:

Last of the five was GlaxoSmithKline (GSK). Of the five it looked like it could be the performer of 2009. Unfortunately, the stock continues to trade in its range - except this time at the lower end instead of the upper range from the start of the year. Support at 982 has at least held. A move back to resistance at 1350p is probably a best case scenario for the rest of the year.

Unfortunately, none of the five have proven their worth yet - will the second half of the year be kinder?

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, market alerts, and stock charts website

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