I have decided to start a Weekly moo river watch on UK private banks, namely, Barclays, HSBC and Standard Chartered, all based on 30-year advanced chart data.
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Barclays Bank
Yearly
We have had three continuous years where we had lower lows and this year is no exception. To end this bear market, we need to get over last year's high at 524.5 pence a share to create a higher high to start a bull run.
Quarterly
We are still stuck in a ginormous downstream moo river since Q4 2006. I think 2006 was when the housing market in the UK was showing signs of topping, but everyone chose to ignore it, even the bank managers. We are testing the upperbank at the moment, a break is required to start a bull run, where people get more comfortable in seeing Barclays shares in the 300's pence league.
Momentum indicators are not particularly bullish yet. RSI has tentatively broken out of the downstream moo river recently and it will be interesting to keep an eye on this one.
Monthly
Bulls will be encouraged by the bullish signals here.
Price has broken the long running downstream moo river, rsi has broken its downstream moo river and Momentum Indicator had an odd-looking W to bounce up and all indicators are supportive.
Banks are really the driving forces of this current stock market rally and they have certainly gone ahead of the rest of the market.
Weekly
If you look back at what happened in 2003 bear market bottom and the rally since, you would see that we are possibly at the beginning of this recovery. Price should recover up to 61.8% fib level of the last cliff drop in 2008, that is 314 pence a share, while the 2003 bear market low was 319 pence a share. So that should really be the minimum or even the maximum target for this current rally.
I am holding 5k worth in this share at an average of 245 pence a share. I will hold onto them either seeing weekly rsi hitting 70 or seeing price reaching into 320 level.
Updated on 16th May 2009
If you look at the weekly price chart, this current bull run is even stronger than the one in 2003 at the end of that particular bull market, at a sharper angle. This currently rising angle can not be sustained, so we are looking for a parabolic top to finish this bull run, which I think will take weekly rsi to 70. After that, we might meander between 235 pence and 345 pence, at a more healthy rising angle of perhap +45 degree and eventually, we might come back to a +30 rising angle into many months ahead.
The medium price target might be £476 pence and the long term price target could be £739 pence a share, which could years to realise.
Daily
We do have correlated moo rivers on price and momentum indicators, particularly rsi. Ideally, rsi could do with touching the lowerbank near 48 or touching 53 again to form a W there. Some early week weakness on price would complete the movement there.
On the price chart, it looks more like that the top of this current run might come on 20th or 21st May.
Hourly
We have left an unfilled gap between 259 pence and 263 pence. On the rsi, we are stuck in a downstream moo river, which provides two possible scenarios for Monday:
1. a break of hourly rsi 63 to give us a dramatic rise towards 85 again to reach price of 320 pence or more;
2. a failure at hourly rsi of 62 brings the price down to fill in that gap and perhaps gives 236 another challenge. If 236 pence does not hold, the next buying price for me will be 193 pence a share and the next support will be 150 pence.
It all depends on Asia as well as any more news from Barclays itself. Barclays is in a sustainable bull run, because there is a continuous newsflow, a good support from a large number of retail investors and the imminent change to paying dividends to investors.
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Standard Chartered
Yearly
We have a green candle bar but a red para sar dot, but it is a long year, so difficult to draw any conclusions there. We did make a lower low this year against the low of 2008.
Quarterly
We had a doji last quarter and now we have a reversal pattern on the candles.
Rsi caved in from a high of 77 to about 40 and bounced off, which is very interesting to note. It seems to suggest that it is only a pullback in a healthy bull run.
Momentum indicators are mostly supportive.
Monthly
A few correlated oddly-shaped W's on price and momentum indicators.
You can easily draw the downstream moo river on rsi by linking up tops of M's and bottoms of W's, it is such a well formed river, that you do wonder who has been charting it all along. As you can see, we are not out of the downstream moo river yet, facing an immediate upperbank resistance near 52ish, a breach of which will be significant.
But price has already broken its down stream moo river and has so far this month stayed above the breached former upperbank for support, which is encouraging. You can draw a tentative upstream moo river at +45 degrees and it gives us an upperbank touch in the near term at 1490ish.
Weekly
This is all bullsland, with everything pointing upwards.
Price: we broke a basing diamond and are now in a second diamond with an upperside wall resistance near 1580. Somehow, in our haste to get out of the old diamond, we have left a gap 1082 and 1095, which has not been filled.
Rsi: the bullish momentum started with the small W in October 2008 and we have done through one flattish basing upstream moo river and have now risen to a much sharper upstream moo river. I think we are headed into 70's, despite current resistance.
All momentum indicators are supportive.
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Updated 17th May 2009:
Daily
While the correlated moo rivers on price and momentum indicators are upwards, we did hit 75 on rsi, which is quite a toppish figure. While price might still move a bit further higher, the momentum indicators are wanting a pullback to be healthy, for example, RSI could have a touchdown at the lowerbank of this upstream moo river at 49.7, which will in turn bring the price down to fill in that gap between 1082 and 1095 pence. A challenge of 1000 pence psychological support is not a bad idea.
I have drawn an upstream moo river on price: you link up candle tops on 7th Jan and 7th May, which serves as our upperbank in the upstream moo river; then you use parallel lines to form three lowerbanks for support, lowerbank 1 links up candle bottom on 19th December; lowerbank 2 links up candle bottom on 21st Jan; and lowerbank 3 links up candle bottom on 3rd Mar.
When price hit the upperbank in an upstream moo river, it tends to meander across to hit one of the lowerbanks to find further support, though it is always possible to touch the upperbank one or more times to find out whether that is indeed the limit for this run.
While the maximum drop from the upperbank to lowerbank 3 is from 1337 pence top to 760 pence bottom, in an upstream moo river, it does not tend to behave like that. so I am seeing 1000 pence as a good support or alternatively 888 pence should hold any pullbacks.
You can certainly draw the upstream moo rivers on rsi, macd, momentum and repulse indicators.
Hourly
RSI dropped out of the upstream moo river and a few indicators are bearishly poised. On Monday, the possibilities are:
1. a good opening higher will shape up a W on rsi and Momentum, giving us another rise towards 1350 pence top;
2. a poor opening eliminates the potential shaping of the W's, which will bring the price down to challenge 1100 pence and finally 1000 pence, the psychological support area.
All eyes will be on Hong Kong and China and the rest of the Asia on Monday.
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HSBC
Yearly
The downturn on this share actually stared in 2006, when we had a yearly doji candle and a reversal started then, not noticed by many.
Since then, we have had three red para sar dots with price more than halved from its 2006 top 1028 pence a share. The downtrend has been relentless with lower highs and lower lows for the past three years, including this year. If we can not breach 938 pence a share, we are still very much stuck in this ginormous downtrend.
Quarterly
It is pleasing to the bulls that we have not made a lower low here so far and has managed to hug back to the bollinger lowerbank for a lifeline, though momentum indicators are still weak.
Monthly
There are no significant bullish signals like correlated W's on price or momentum indicators.
You can draw that downstream moo river on rsi, which is quite an obvious one and we have bounced up from lowerbank 1 towards upperbank and we have not finished the job yet. So it is a downstream moo river with one upperbank and two lowerbanks, though lowerbank 2 is not too low or too close to zero to be a valid bank any more.
Momentum indicators are trying to bounce up and there is a W bounce on elder ray, which is useful.
Weekly
This has been the bullpark for the past 9 weeks as price almost doubled up from its March low. The upper bollingerband is near 664 pence a share.
But we do have some resistances at the moment. RSI is hitting the last upperbank in the downstream moo rivers, but fortunately it is only 49.5, so still some room to manoevour.
MACD is bullishly crossed and every other indicator is still supportive. There are no M's or correlated M's in sight, so bulls can breathe and enjoy their bull run by buying on dips and dives for a while yet.
Much should come as guidance from the monthly rsi downstream moo river, watch that one closely.
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Updated on 17th May.
Daily
On the price chart, you can draw a similar upstream moo river as of Standard Chartered, this time, with two upperbanks and one lowerbank. We hit upperbank 1 at 583 on 8th May and the upperbank 2 is a higher one and lowerbank for Monday is near 488 pence and there is also a historical support near 437 (from a breached triangle upperbank from 3rd October 2008).
You can draw similar upstream moo rivers on momentum indicators as well and it is quite clear that they all had a first rejection by an upperbank last week, which seems to suggest either another challenge of the upper limit at the upperbanks or pulling back further to find key support somewhere.
I reckon on the price, there is an unfilled gap as well between 489 and 496 pence.
Hourly
For Monday, the possibilities are as follows:
1. a good start brings forth W's on Elder ray and Momentum Indicator, which takes price for another challenge of upperbank 1 near 608 pence;
2. a test of lowerbank in the upstream moo river on hourly near 489 pence.
The momentum indicators are all over the place, not giving out strong signals for either side, so it is more likely that the pullback on price might continue, as we tested upperbank on 8th May. A meandering crossing from upperbank to lowerbank in an upstream moo river is a healthy pullback, a breach of banks is an important signal to watch out for breakout trades.
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