Market Direction: Gold Pennant Support at $1,220
BT Group (BT.A): 510p Trend Channel Target
What is interesting about the daily chart position of BT Group at the moment is the way that the shares have managed to make good on the bear trap rebound from below the former February intraday support. It is also helpful that they appear to be strong enough to withstand the negative pressure of the latest dead cross sell signal between the 50 day and 200 day moving averages. Indeed, the next step of the stock’s rehabilitation should be an end of day close back above the 455p level of the two main moving averages, especially given the way that we are trading in the aftermath of a push for the RSI through the neutral 50 level to leave it at 55/100. This RSI break should be a leading indicator on further recovery, with the hope being we now have enough evidence for a top of July price channel target as high as 510p over the next 6-8 weeks. At this stage only back below the floor of the 2015 price channel at 430p is really seen as being negative enough to delay the upside scenario.
easyJet (EZJ): Higher April Support Suggests Turnaround
It seems worth updating the technical position at easyJet, if only on the basis that there appears to be a change of emphasis on the charting front. This is said on the basis that we have a rebound off an uptrend line in the RSI window, which can be drawn in from as long ago as January. Indeed, the double bounce off this feature can be regarded as a leading indicator on recovery. The best way forward from the present position is either to go long versus the March support at 1,415p – for aggressive traders – or wait on an end of day close back above the 50 day moving average for those who are still concerned we are looking at a slow breakdown at the no frills group.
Intercontinental Hotels Group (IHG): Golden Cross Points to 3,400p
My feeling is still that the Airbnb concept is one that is very dangerous for the big players such as Intercontinental Hotels. Indeed, it may be similar to what happened to the flag carriers on the advent of the no frills groups. At first they were snooty and condescending; then they lost vast amounts of money; and finally they were forced to effectively copy the business model. As far as Intercontinental Hotels is concerned, on its daily chart we can see how the shares are actually trading in the wake of a golden cross buy signal between the 50 day and 200 day moving averages. This is more significant even than usual given the cross here came at a time of relatively flat price action – therefore the lag in this signal can be ignored more than normal. As for what we expect next, the ideal scenario would be to regard the shares as being in prime bull mode, especially while they remain above the floor of a rising trend channel from last year at 2,750p. While this is the case one would be looking to the 2015 resistance line projection as high as 3,400p over the next 1-2 months.
Small Caps Focus
Boohoo.com (BOO): Charting Upside towards 70p
Today’s small caps are in the main revisiting previous calls on these stocks, with Boohoo arguably being one of the better of the recent highlights, given the way that being bullish here seemed to be somewhat overenthusiastic to say the least. However, it can be seen how it is possible to draw in a rising trend channel on the daily chart from as long ago as October 2014. But the real event in the near term has been the consolidation of a major 45p zone early 2016 resistance break this month, which smacks of a runaway move to the upside being on tap. Indeed, one would be looking to a top of price channel target as high as 68p, while there is no end of day close back below 45p, as new support. In the meantime any weakness to cool off the overbought RSI at 77 can be regarded as a buy opportunity, especially to take us back towards 46p–47p.
Gulf Keystone (GKP): Key 5p Level
The previous call on Gulf Keystone from a technical perspective was to give this situation the benefit of the doubt while 5p was held. As things stand even this nightmare scenario has been delivered, with the only real hope here being that we may manage a weekly close back above 5p to delay the agony of what looks to be a very serious and possible terminal meltdown. What battered bulls will be looking to here is a recovery of the former March floor at 5.6p – the reason why the benefit of the doubt was given while Gulf Keystone remains above 5p. Barring this the decline of the past couple of years seems to be unstoppable.
Highland Gold Mining (HGM): 125p 2014 Price Channel Target
To be looking for long gold plays on the stock market does not exactly appear to be rocket science. Perhaps the only really complicated aspect is gauging how much we can realistically expect the likes of Highland Gold Mining to recover. Judging by Highland Gold Mining today, the answer could be ‘quite a lot’. This is because we have been treated to a sharp key reversal to the upside. The message at the moment is therefore while there is no end of day close back below today’s bull flag floor at 76p we can still look to a decent break higher. The favoured destination at this point is the top of a wide rising trend channel from early 2014 with its resistance line heading as high as 125p, a 2-3 months timeframe target.