Market Direction: FTSE 100 above 6,250 Targets 6,600
Rolls-Royce (RR.): Technicals Point to 800p
It is perhaps unfortunate that over the past couple of years and more Rolls-Royce’s most regular contribution to the stock market has been profits warnings. However, the jet engine group looks to be on a better footing chart wise as 2016 progresses, which is notable in the wake of the latest bounce off a rising November price channel / 50 day moving average at 662p. Above this support combination on a weekly close basis suggests an upside of 800p at the price channel top as soon as the end of next month.
Royal Mail (RMG): Above 200 Day Line Targets 535p
Royal Mail shares may have disappointed in their first year on the London stock market, but the period since then seems to have largely witnessed rather more stable price action. What can be seen over the recent past is the way we have been treated to a relatively clean break above the 200 day moving average, now at 463p, over the past month, which suggests that the bulls have got back in control in a reasonably robust fashion. Indeed, we are confident enough to suggest that provided there is no end of day close back below the 200 day line, shares of Royal Mail should be able to deliver considerable fresh upside. The favoured destination at this point is seen as being the top of last August’s rising trend channel at 535p over the next 1-2 months.
Saga (SAGA): Bull Flag at 200 Day Line
While it is evident that shares of Saga are perhaps not in the front line of FTSE 100 stocks trading, the setup here in the near term on a technical basis appears to be quite sound. This is said given the way that there is a bull flag on the daily chart either side of the 200 day moving average, now running at 200p. It also helps that the RSI 50 level was recovered as long ago as the middle of last month, around the time when the shares also broke back above their 50 day moving average, now at188p.
All of this goes to suggest that we are looking at a slow, but steady recovery for Saga, which could promise further upside in the event of a decent weekly close above the 200 day moving average. Indeed, the predication to make from a charting perspective is that above the 200 day line either this week or next week should be enough to take the stock as high as 230p by the end of next month. Only sustained price action back below the 50 day line would currently suggest that this situation was going to disappoint for the longs.
Small Caps Focus
Circle Oil (COP): Above 200 Day Line Targets 6.5p
Although it has to be admitted the recent past has been a rather frustrating time for Bulls of Circle Oil, the latest developments here suggest that the extended base in place since December is starting to turn around in favour of the buyers. This is said in the wake of the latest gap higher for the stock through the 50 day moving average of 2.44p. When you add in the way that there has also been a break above the neutral RSI 50 level to leave it at 62, and a rebound for the oscillator above the 50 level, it can be assumed there is decent momentum behind this situation.
Indeed, one would be looking for a retest of former February resistance / 20 day moving average at 4.2p over the next 4 to 6 weeks. After that, a weekly close above the 200 day line would target as high as 6.5p over the following couple of months, especially given the way that the April gap to the upside effectively cancels out the December gap down feature.
Corero Network (CNS): Extended Breakout
It has been quite a while since I last looked at the daily chart of Corero Network Security. However, even though this is the case, it can be seen from the daily chart that since September we have been on alert for a decent move to the upside for this small cap stock. The reason for saying this is that that month both the 50 day and 200 day moving averages were recovered, lying around the 12p level, and since then they guided the stock higher in quite an aggressive way. In fact, it was as long ago as October that we were treated to a golden cross buy signal between the 50 day and 200 day lines.
The current situation that is that all the bulls are really waiting on is a sustained clearance of former initial 2016 resistance at 30p, which should be on tap over the next few sessions. If this can be achieved promptly, one would be looking to the top of the rising 2015 price channel as high as 50p over the next 1 to 2 months. Only back below the 50 day moving average/2015 price channel floor at 23.71p currently would even begin to delay the upside argument.
Sirius Petroleum (SRSP): 0.6p Price Channel Destination
What is evident on the daily chart of Sirius Petroleum over the recent past is the way that we have been looking at a rather slow turnaround for this minnow. This is said despite the way that since early February the shares have largely been back above the 50 day moving average currently at 0.3p. Therefore, it was all the more disappointing that after a spike through 0.5p last month, the shares came back to retest the lower levels. However, it is to be hoped that the latest spike through the 50 day line at 0.33p will be sustained. If this is the case we can expect a retest of the top of a rising 2015 price channel/0.6p zone target over the next month or so.