Wednesday, May 19, 2010

FTSE 250 Bear Flag Breaks

The FTSE 250 ETF's (MIDD) bear flag is playing to form with a sharp move down Wednesday. The ultimate target is either a measured move to 840p (based on distance from high to neckline) or a relative loss of 10.5% for a target of 852p. In either case, the downward targets for the FTSE 250 would take the index below the Q4 congestion of 2009 when prices traded in a 875-950p range. Angling a recovery from 840-850p lows may prove difficult with large areas of overhead supply governed by former price congestion and two key moving averages. Playing relief rallies to the 50-day and/or 200-day MAs may have to entertain bulls until the worst of the selling is over.

Zignals Chart Image

A close below 950p would create the largest area of overhead supply, converting the breakout and rally of March-April into a massive bull trap (i.e. anyone who likely bought FTSE 250 components in March/April and still held their shares on loss of 950p would be holding a losing position). So while downward targets of 850p may sound a long way away the conditions required to get there are approaching fast.

The Zignals Trading Strategies signals from Tuesday are mostly stop exits or unacted long entries. You can subscribe to any of the strategies listed below here.


New Short Target and Stop for IPL (Sydney) at AU$2.96 (EoD): Target AU$2.65, Stop AU$3.23

ASX Price x 20-day MA

Long Confirmation Entry for CCL (Sydney) at AU$11.31
Long Exit at Stop for AMP (Sydney) at AU$5.74
Long Exit at Stop for ORG (Sydney) at AU$14.67
Long Exit at Stop for TAH (Sydney) at AU$6.41

Developing a Strategy

Long Confirmation Entry for WMT (NYSE) at $53.43

Frankfurt High Winners

Long Unacted Entry for BAS (Frankfurt) at €45.49 (EoD): Entry signal given, but exited position on same stock too recently (4) days ago.

Indian Golden Brown

Long Confirmation Entry for SBI (Mumbai) at INR2266.5

Indian High Winners

Long Entry for SBI (Mumbai) at INR2266.5
Long Confirmation Entry for ONGC (Mumbai) at INR1035.1

Irish Oak

Short Confirmation Entry for EG7 (ISEQ) at €7.37

Mumbai Elm

New Long Target and Stop for GLXO (Mumbai) at INR2215.1 (EoD): Target INR2498.1, Stop INR2043.9

Relative Aussie

Long Entry for LEI (Sydney) at AU$32.77
Long Exit at Trailing Stop for WOR (Sydney) at AU$24.70

Relative Canada

Long Confirmation Entry for IDX.UN (Toronto) at $10.22
Long Confirmation Entry for VIP.UN (Toronto) at $8.62
Long Confirmation Entry for FAP (Toronto) at $6.30

Relative Frankfurt

Long Confirmation Entry for IDS (Frankfurt) at €15.80

Tri-Indicator Aussie

Long Exit at Trailing Stop for OSH (Sydney) at AU$5.35
Long Exit at Trailing Stop for WOR (Sydney) at AU$24.70

Tri-Indicator Indian

New Long Target and Stop for PFC (Mumbai) at INR295.1 (EoD): Target INR325.6, Stop INR266.4

UK Golden Brown

Long Exit at Stop for CCAP (London) at 15p

UK High Winners

UK High Winners New Long Target and Stop for ACMG (London) at 204p (EoD): Target 225p, Stop 194p
Long Exit at Stop for CCAP (London) at 15p

US High Winners

Long Confirmation Entry for WMT (NYSE) at $53.43

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