Zak’s Weekend Chart Round-Up

5 mins. to read
Zak’s Weekend Chart Round-Up

FTSE 100 Stocks

Barclays (BARC): Risk of another Major Support Test

Given all the rumours surrounding the state of European banks, with the German and Italians especially in focus, the recent revival of the UK counterparts seems all the more welcome. It also suggests that we are seeing a divide in perception by investors in a post Brexit world. Fortunately to date this is working in favour of those who hoped this country might be better off outside the European Union. The best that can be said now in terms of the price action of Barclays is that we have a relatively encouraging revival for the shares, considering that there was such a sharp gap down after the four day island top towards the end of June. The picture now is that the past week has consisted of a consolidation either side of the 20 day moving average at 148p. The other point to note is that even after the post Brexit recovery the RSI has not yet been able to crawl back above the neutral 50 level and stands at 47/100. While this is the case one would fear there could be a relapse, and therefore it may not be wise to look for a new leg to the upside unless there is an end of day close above both RSI 50, and above the latest swing high at 152p. While this is the case it is difficult to rule out a “final” dip back towards the initial July 130p – 135p support zone.


EasyJet (EZJ): Below 20 Day Line Risks 1,000p Test

It is now the case that the past year is turning out to be one of the worst ever in terms of terror attacks in Continental Europe, with little sign that the situation can be ameliorated. The Nice attack has understandably led to a sell-off in tourism related stocks, with EasyJet being in the frontline of negative sentiment. This comes in the wake of what has already been a grim month for a company which very much tied its flag to the mast of the UK remaining in the European Union. What can be seen as far as the current charting position is concerned is that we have seen a failure just below the 20 day moving average at 1,184p and below the neutral RSI 50 level, which suggests that the recent rebound is merely a bear market rally, rather than a sustainable move. The view now is that even if we have seen the bottom for shares of EasyJet this year at and around the 1,000p zone, a final test for support towards this area may be required for late July or early August. At this stage the earliest obvious buy signal would be an end of day close back above the 20 day moving average at 1,184p.


RBS (RBS): 20 Day Line Block

RBS is a good example of how the worse the sentiment is towards a company, the stronger the bear squeeze we can be treated to. What is evident here since the end of last month is the turnaround from the narrow exhaustion gap bear trap rebound under the June low of 151.50p. Since then there has been a break back towards the 20 day moving average at 187p, but the message at the moment is that only an end of day close back above this number would really suggest that the present strength in the stock is not something to sell into, especially given the way that the RSI at 45.96 is still well below neutral 50. At the very least one would expect to see a test of the 10 day moving average at 170p before further upside was delivered.

Royal Bank of Scotland

Tesco (TSCO): Risk of 150p – 155p Zone Retest

It was certainly quite an achievement for shares of Tesco to rally from 143p in the wake of the Brexit vote to as high as 178p at best before slipping. But what can be seen on the daily chart, apart from the sharp squeeze at the end of last month, is how the basic negative structure of the price pattern has not really changed. This is said especially in the wake of the as yet unfilled gap to the downside seen at the beginning of this month down through the 200 day moving average at 172p. The relatively simple setup is therefore that provided there is no end of day close back above the 200 day line we could see a partial or even full retest of the worst levels of June. The favoured scenario in this respect is for a retest of the early 2016 150p – 155p support band, even if the shares then manage to stabilise for the long haul.


Small Caps

ITE Group (ITE): Triangle Target at 180p

We have a couple of charting favourites as far as the small caps are concerned this week, at least as far as the companies being among the more high profile amongst private investors. The position currently on the ITE Group daily chart is that we have a very sharp looking end of week daily candle for the stock, with the low of the day the open, and the close likely to be the high of the day zone. All of this suggests that at least while there is no end of day close back below the 200 day moving average at 143p the top of a broadening triangle from last September with its resistance line projection heading as high as 180p could be the target over the next 2-4 weeks.

ITE Group

Nanoco (NANO): Above 10 Day Line Targets 70p Plus

Given the way that the stock has disappointed for so long, the sharp rise for Nanoco shares over the recent past has been all the more impressive. This has been delivered via a steep rising trend channel from the end of last month, and support from the 10 day moving average at 58p. The view at this time is that provided there is no end of day close back below the 10 day line, the upside here could be as great as the June resistance line projection currently heading as high as 71p over the next 2-4 weeks.


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