Zak’s Daily Round-Up: ANTO, BLT, CCL, ONZ and PREM
Market Direction: Crude Oil above 20 Day Line Could Lead to $60
Antofagasta (ANTO): November Price Channel Target
The sage of leading mining stocks, and whether they have finally turned the corner for good, continues to inspire traders. The reason for suggesting this is the way that there was a one third retracement for the shares from the March peak to the May floor which was severe enough to test the mettle of even the most enthusiastic blue chip mining devotee. But at least from a charting perspective the peak and the trough can be placed within a rising trend channel which can be drawn in from as long ago as the end of November. Also helpful for May to date is the way we have seen higher lows put in since the 400p floor on May 13th. Indeed, the view at this point is that provided there is no end of day close back below the 10 day moving average at 429p/2015 price channel floor, we should be anticipating further recovery moves, if not a decent intermediate rally. The favoured destination at this point is regarded as being the 513p peak of April over the next 2-4 weeks. Above that on a weekly close opens up the idea of a push as high as the November resistance line projection at 650p plus on a 2-3 month timeframe.
BHP Billiton (BLT): Broadening Triangle to 1,150p
There will be few who would deny that the retracement for shares of BHP Billiton from last month’s peak was as unwelcome as it was painful. This was especially the case given the way that the peak came in the form of a bull trap spike through the 200 day moving average, now at 872p, and then well above 900p. The other key point to note is that the failure was a gap fill decline from the top of the bearish chart gap to the downside in November. This was a gift of a sell signal, given the top of the gap at 1,024p was the notional place to go short, while the eventual high was just 6p above this level. The position at the moment is that we are looking at an extended climb along the floor of a January broadening triangle which has been in place alongside an RSI uptrend line in the oscillator window from December. All of this suggests that we should keep the faith with the recovery argument here, and that as little as an end of day close back above the 200 day line can be regarded as a decent momentum buy trigger. The best case scenario technical target on the upside above the 200 day line is through the 1,030p April peak and as high as the 2016 resistance line projection of 1,150p. The timeframe on such a move is over the course of July.
Carnival (CCL): Risk of February Support Retest
Although it has been evident that the price action of cruise line operator Carnival hinged on the low Crude Oil price, the volatility in the shares over the course of 2016 to date would suggest that the position here is a little more complicated than the relationship with fuel costs. However, with Crude Oil through the $50 a barrel level, and presumably with Saudi Arabia and Russia breathing a sigh of relief, we have seen a topping out of the stock over the post February period. This has taken the form of a head & shoulders breakdown, with the latest gap down through the 200 day moving average at 3,494p underlining the weakness of the situation. The message at the moment is that at least while there is no end of day close back above the 200 day line, one would fear a move down to the floor of a November price channel at 3,200p. However, a weekly close below the 2015 support line could lead to a more full blooded pullback to retest the February support zone under 3,000p. That said, this does appear to be on the pessimistic side at this stage.
Small Caps
Onzima Ventures (ONZ): Above 50 Day Line Targets 1.6p
Onzima Ventures is perhaps a stock that does not get the coverage it deserves, especially given the recent chart set up we have been treated to. The main charting points of interest here were the break above the 50 day moving average, now at 0.83p, at the end of February, and the way that since then any minor dips below this feature have been opportunities to buy into this situation. Indeed, what can be said now is that provided there is no end of day close back below the 50 day line / rising October price channel, we could be looking to significant near term upside. Just how Onzima Ventures could fly is suggested by the 2015 resistance line projection currently pointing as high as 1.6p. This is a technical target which is expected to be hit as soon as the end of July.
Premier African Minerals (PREM): 2015 Price Channel Target at 1.6p
Premier African Minerals can be described as something of old favourite from a charting perspective. Given the way that prior to April ricochet off the 200 day moving average above 1p, this looked like a situation which could really fly. In fact, despite the near-term disappointment and the retracement back to the floor of a rising trend channel from October, we are still looking at a relatively healthy technical picture. Indeed, the hope now would be that while there is no break back below the initial March neckline support at 0.5p we can expect further constructive moves for Premier African Minerals. As little as an end of day close back above the 200 day moving average, now at 0.8p, could lead to the top of last year’s rising trend channel at 1.6p, especially in the wake of the latest bounce off a February RSI support line towards the 40/100 level to leave it above the neutral level at 51.
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