Zak’s Daily Round-Up: BP., CPG, EXPN, FCR and HGM

Market Direction: Gold, Break of 10 Day Line at $1,278 Required

BP (BP.): December Price Channel Targets 415p

What is interesting about the daily chart configuration of BP is the way that despite the massive volatility in the Crude Oil price, the progression here in recent months has been relatively consistent. This is because most of it can be captured within a rising trend channel which has been in place since the beginning of December. The floor of the channel currently runs level with the 350p level, and just below the present level of the 50 day and 200 day moving averages at 357p. All of this is backed by the way we have just been treated to a bounce off an extended uptrend line in the RSI window at neutral 50 / 100 which has been in place since as long ago as January. This is of note given the way that the stock actually went on to make marginal new lows for February. The position now though, is that we are looking to a decent bear trap rebound from below the 50 day line and above the floor of the December channel, something which suggests that there is significant bullish momentum here. On this basis one would be happy to call the stock up as high as the late 2015 resistance line projection at 415p over the next 1-2 months, especially if we receive a decent end of day close above the 10 day moving average at 365p today or on a weekly close for Friday.

Compass Group (CPG): Gap Fill Rebound Targets 1,400p

As far as shares of Compass Group are concerned currently it can be seen how we have remained in a benign looking uptrend here for quite some time. The kickstart point for the move was the November island reversal, with the crossing of the 50 day moving average above the 200 day line in December consolidating the event. As for where we are at the moment, it can be seen how there has been persistent support towards the 1,200p zone since the end of February, with the latest gap fill rebound suggesting that a fresh leg to the upside is on its way. Indeed, the view is that provided there is no end of day close back below the 50 day moving average at 1,239p, the target here over the next 1-2 months should be as great as the late August resistance line projection pointing to 1,400p. An RSI rebound for the start of May above the neutral 50 level to leave it at 62/100 does imply that we are revved up for a new intermediate phase.

Experian (EXPN): Above 1,300p Points to 1,400p

What is a standout as far as the latest technical position on the daily chart of credit checker Experian is the way that even though this is a FTSE 100 stock, the price action here near term has tended to be rather choppy. However, it is possible to capture the post November price action within a rising trend channel with its floor running level with the 50 day moving average at 1,238p. The rally is also backed by a multi tested RSI support line which can be drawn in from as long ago as the beginning of March. Therefore, the view here is that provided there is no end of day close back below the 50 day line, we should be treated to further significant upside. The favoured destination at this point is seen as being as high as the November resistance line pointing to the 1,400p zone. The timeframe on such a move could be as soon as the end of next month, especially if we see a swift weekly close above the 1,300p level which has blocked the price action over the past month.

Small Caps

Ferrum Crescent (FCR): Rising September Price Channel

I have to say that I was dragged into the charting situation which is Ferrum Crescent kicking and screaming, via a Twitter Follower request. It is a good thing that I persevered, given the massive spike we have seen in the stock over recent sessions. The big plus for now is the break of the 200 day moving average running at 0.27p. A decent end of day close above this should be enough to offer fresh life to the recovery here. It would bring in the prospect of a top of rising September price channel target as high as 0.7p. The timeframe on such a move is regarded as being the next 1-2 months, or of course rather less if the recent momentum is maintained. At this stage only back below the former February resistance at 0.2p would really delay the upside scenario. Dips towards the 200 day line are regarded as buying opportunity.

Highland Gold Mining (HGM): Big 130p Technical Target

Apart from on the downside, it has traditionally been the case that shares of Highland Gold Mining have been a rather slow play, at least for short term investors. This was the case initially this year, but it can be seen that at least from the beginning of February with the the break of neckline resistance at 60p, there has been an acceleration in the price action. It has opened up the prospect of a decent upside target which could be as great as the top of a wide rising trend channel in place since the early part of 2014. This channel has its resistance line projection pointing as high as the 130p zone. Such a target does admittedly appear to be rather ambitious, but one would venture to suggest that at least while there is no end of day close back below the 50 day moving average at 76.44p, it does appear to be a valid target. At the same time, interim weakness towards the 50 day line to improve the risk / reward of going long is welcomed.

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