Zak Mir’s weekend missive – Three Little Bears

By the end of this week I grew a little tired of waiting for the FTSE to deliver a big splash to the upside. Indeed, the best it could do was bounce off a May uptrend line running through 5760 yesterday.  That is not to say that there may not be strong progress next week but, it does look as though the autumn may be a tough one and punters will have to be patient as well as very accurate on your charting techniques! This is even the case for those who managed to bag some lucre on the rather unfortunately named Bumi (BUMI) this week!

or this weekend’s blog I have a triple bear selection where technical keyhole surgery is the name of the game in looking at these charting plays.

Evraz

The interesting thing about Evraz (EVR)  is the that we can see the shares closing fractionally below previous September and October intraday support at £2.35. What is also worth noting from a trading perspective is the way that there is a gap floor from the start of September at £2.27. On this basis,  and with the RSI now well below the typical neutral 50 level and the oscillator having failed three times over the past few days at that level, we would be looking for a minimum downside to the early September gap at 227p and perhaps a retest of the August/September support zone below £2.10 which I think is the real destination of this breakdown

Yule Catto

As far as Yule Catto (YULC) shares are concerned there are a couple of major points to note here. The first is the way that even on the summer rally through 180p, that the stock was unable to test the 200 day moving average which is now at one 187p. In such situations where resistance comes in well below the 200 day line even after multiple attempts, one has to fear for the buy argument in the near term. Indeed the break of it M shape reversal formation from last month’s support at 160p suggests that while there is no end of day close back above this level that we should be looking for at least a test of support at the August sub £1.40 low level. The normal expectation would in fact be for a test of the last major low which was in July at sub 130p, primarily on the basis that the whole post June price action is essentially a  gap fill and then a failure.

Bodycote

Bulls of Bodycote are also probably not be very happy at the moment. During September and October we have an M shaped reversal, made all the more bearish by the way that today’s gap to the downside leaves an island top on the daily chart.

The view now is that while is no end of day close back above the top of the latest gap at £3.72 one would be looking for a retest of July support – just above 300p. Those not willing to risk as much as £3.72 with a stop would use the black 200 a moving average at £3.61 as a more aggressive stop loss.