Market Direction: Sterling/Dollar 200 Day Line Block
Randgold Resources (RRS): Price Channel Rebound
It has certainly been quite a journey for shares of Randgold Resources during the year to date. This is over and above the usual health and wealth warnings that would accompany mining stocks. As for the near-term action here, it can be seen how we have most likely been treated to a rebound off the floor of a rising October price channel, with the floor of the channel currently running at 5,646p. The message at the moment is that while there is no end of day close back below the floor of the channel one would be seeking out near-term recovery here after the post April peak towards 7,000p. All that cautious traders need to do now is wait on a clearance of the February RSI resistance line at 45/100 as a momentum buy trigger on a potential new leg to the upside. The favoured destination at this point is seen as being as great as the 50 day moving average at 6,297p initially, with the 7,000p zone back in focus as soon as the end of June on a decent weekly close back above the 50 day line.
Shire Pharma (SHP): Trend Change Progress
Shire Pharma, along with the other big UK drugs plays, is a company in an area of the stock market which inspires confidence from a fundamental perspective. This is helped on a technical view given the way that the shares have apparently done a good job of changing trend over the past couple of weeks. This process was started a month ago with the break of the RSI up above the neutral 50 level on a sustained basis. The big event since then has been the break of a red line of resistance evident on the daily chart since as long ago as the end of July last year. The likelihood now is that provided there is no weekly close back below the trend line currently running at 4,152p – level with the 50 day moving average – we can justifiably be looking for a decent positive trend change. Indeed, the favoured scenario is for further progress within a rising trend channel in place from as long ago as February. The resistance line projection of the channel is pointing as high as 4,950p, with the assumption to make that this could be hit as soon as the end of next month.
Unilever (ULVR): 3,400p plus Price Channel Target
Unilever strikes one as being more of an investment stock than a trading play, but one can say that from a cynical perspective it is very often the short-term trades that go wrong which end up being our most long lasting investments. But stock market clichés aside, with Unilever it would appear that the stock is well perched as far as a potential trading buy. This is said in the wake of the rebound off the floor of a rising October trend channel / 10 day moving average at 3,111p. The view currently is that while there is no end of day close back below the notional double support at 3,111p we could see a quite robust fresh move to the upside. The favoured destination at this point is seen as being as high as 3,420p – the top of the 2015 price channel, with the timeframe on such a move as soon as the end of July.
Wolseley (WOS): Gap Fill Selloff
Wolseley is a highly volatile and speculative stock, even at the best of times, with the present setup as we go into June a good case in point. This is said in the wake of the September gap fill sell off, via a gap to the downside itself. The impression given is that the bears are very much back in charge here, and it would be unwise to underestimate the downside. This could be as great as the floor of the February gap to the upside at 3,425p. However, just to build confidence in the bear argument it may be wise to wait on an end of day close back below the 200 day moving average at 3,799p, just in case post March support in this zone kicks in again.
Small Caps
Amphion Innovations (AMP): December Price Channel Support
Although to my mind – and my head – the greatest medical crisis of the 21st century is male pattern baldness, the consensus seems to take the view that resistance to antibiotics could be worse. Hence companies such as Amphion Innovations are in the frame in a positive way. As far as the charting position here is concerned it can be seen how there has been a rebound off the floor of a rising trend channel from December, with the floor of the channel currently level with the 10 day moving average at 3.24p. Above this notional double support the stock could stretch as high as the late 2015 price channel top at 5.5p over the next 2-3 months.
Gulf Keystone (GKP): 50 Day Line Clearance Required
Although one always feels that it is the fundamentals which are leading the technicals as far as the share price of Gulf Keystone are concerned, at the same time it would be wrong to ignore the message of the daily chart. What can be seen here currently is that we are looking at a falling wedge in place since as long ago as December, but with resistance towards the 50 day moving average at 5.58p. The ideal scenario is that the 50 day line is cleared on a weekly close basis to prove to the cynics that this situation is really back on the front foot chart wise.
Immupharma (IMM): Target towards 50p
It is difficult to resist taking a look at the daily chart picture at the moment, given that this week sees the aftermath of one of the strongest technical signals – an unfilled gap to the upside through the 200 day moving average at 29.46p. The previous technical target was around the 40p level, but it looks as though we can revise the upside significantly higher. Indeed, the hope now would be for at least a brief touch of the top of an October rising trend channel as high as 50p before the oversold state of the price action causes the profit takers to take their toll.