Zak’s Daily Round-Up: AHT, DCC, ISAT, TW., AVM and MXO

4 mins. to read
Zak’s Daily Round-Up: AHT, DCC, ISAT, TW., AVM and MXO

Market Direction: Euro/Dollar Initial 50 Day Line Support at $1.13


Ashtead Group (AHT): Above 50 Day Line Targets 1,000p

It would appear that as far as shares of Ashtead Group are concerned, we are looking at a situation where there has been a clear improvement in the technical profile over the recent past. This has happened on no less than three fronts. The first are the higher lows on the daily chart since February, the second the recovery of the 50 day moving average at 863p, and the third the extended uptrend line in the RSI window since February which has been multi tested. What helps so far this week is the way that the stock has bounced off the 50 day line at 863p, with a gap to the upside. The implication is that provided there is no end of day close back below the 10 day moving average at 887p, one would expect to see a further significant gain. The favoured destination at this point would appear to be the top of a rising trend channel which can be drawn in from as long ago as the end of January. This has its resistance line projection heading as high as 1,000p, a target which is expected to be hit as soon as the end of this month.


DCC (DCC): Target as High as 7,000p

Although the sharp turnaround that we saw on the daily chart of DCC since February may have caught some traders on the hop, from a technical perspective the move higher we have been treated to is not too surprising. This is because the turnaround in February came in the form of a bear trap gap reversal, which consisted of a hammer candle as well as the gap to mark the bottom. If you factor in the bullish divergence in the RSI window which accompanied the reversal, and the way that the rally has seen the 50 day moving average come in as support consistently, then the prospects for further gains are good, even though we have already come up a long way. The chances are therefore that while there is no end of day close back below the 50 day moving average at 6,089p/January rising trend channel, there could be further progress. Just how high the stock could fly is suggested by the 2016 resistance line projection currently pointing to 7,000p. The timeframe on such a move is seen as being as soon as the end of next month.


Inmarsat (ISAT): Island Reversal

It has not exactly been a great couple of months for shares of Inmarsat, on the basis that there has been the aftermath of an island top reversal that has been in place since as long ago as the end of April with the gap to the upside. This formation was completed with the gap to the downside earlier this month. As might be expected there has been follow through on the latest gap, but at least the fact that the shares are oversold has led to a rebound off a falling trend line from January in the RSI window. This could lead to a dead cat bounce back towards the 10 day moving average at 813p. However, only an end of day close back above this feature would really suggest that we could be due a fill of the May gap top at 860p over the next few weeks.


Taylor Wimpey (TW.): Gap through 200 Day Moving Average

From a charting perspective it can be said that chart gaps can be one of the more useful and reliable technical events for traders, and this may be the case now in the wake of the gap to the upside we are being treated to currently. The event in question for shares of Taylor Wimpey is the gap through the 200 day moving average at 189p, with the message being that one would be shooting for an eventual move as high as the December price channel top at 225p. At this stage, only a move back below the floor of the latest gap at 180p would even begin to delay the 2 month upside scenario.


Small Caps

Avocet Mining (AVM): Gap Fill Rebound Back Towards 11p

In theory it can be said that near term shares of Avocet Mining actually hit the implied technical target which can be seen on the daily chart at the top of a rising trend channel from last year through 11p. However, the aftermath of the latest gap fill from the end of last month at 6.95p does suggest that the bulls may be on the receiving end of a second bite at the cherry. This is especially the case while there is no fresh end of day close back below 4.95p. Otherwise those who are cautious on the potential upside scenario can wait on an end of day close back above the 10 day moving average at 7.93p before taking the plunge on the upside.


MX Oil (MXO): 50 Day Line Break

There will be few who would argue that MX Oil remains an intriguing situation both on a technical and fundamental basis, and not only because this is very much on the watch lists and in the portfolios of many a private investor. The present position is that we are looking at the aftermath of a potential triple bottom formation, with the twist being that the last low was a narrow bear trap rebound from below the 0.51p level seen in January. This implies that some bears will have been caught out and that there could be a build-up of momentum for recovery. At this stage the only thing missing to confirm a sustainable recovery is an end of day close back above the 50 day moving average at 0.84p. Such a trigger could take the shares into the main resistance from March at 1.36p over the 4-6 weeks after any 50 day line break, especially if accompanied by a decent break of neutral RSI 50 versus 47 currently.


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