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Asia-Pacific Markets Charting Asia with Daryl Guppy

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  Monday, 6 Mar 2017 | 12:07 AM ET

Op-Ed: US crude oil testing resistance

Posted ByDaryl Guppy
  Monday, 27 Feb 2017 | 10:00 PM ET

Op-Ed: How to play the euro/yen swan dive

Posted ByDaryl Guppy
  Tuesday, 14 Feb 2017 | 1:31 AM ET

Op-Ed: Want to trade gold rally? Go for silver

Posted ByDaryl Guppy
Scott Olson | Getty Images

The rebound rally in gold is well established with a move above $1,220. The upside target is near $1,290. It's good to see the gold uptrend continuing, but the upside target delivers 5.7 percent profit. Rather than trade gold, there are more effective and profitable ways to trade this rebound. Gold's companion, silver, has similar characteristics but offers a higher return for the same behavior.

Silver lags the gold price behavior. Silver has a resistance level near $18.75 and then at $21.00. The $18.75 level is the equivalent to the $1,290 resistance level on the gold chart. Since silver lags gold, its price is only just moving above the Traders ATR breakout line near $17.30.

A breakout at this level has target near $18.72. This trade offers a 8.3 percent return compared with a 5.7 percent return from gold for the same price behavior move.

Silver has a longer term upside target of $21.00. That's 16.6 percent from the current price near $18.00.

Silver is slower to move, but it has more room to move and that delivers better profits. Note the silver price is shown in cents.

»Read more
  Sunday, 5 Feb 2017 | 11:37 PM ET

Australian dollar heading toward resistance

Posted ByDaryl Guppy
John Phillips | Digital Editor | CNBC

Starting in January, the Australian dollar developed a strong rally. The rally has technical limits and two significant resistance features which may act to cap the rise and drive the Australia dollar into weakness.

When applying technical analysis indicators, it is important to know when not to apply a particular indicator. We use Guppy Multiple Moving Average indicator analysis to identify trend strength and changes. In these situations it is a powerful analysis tool. The Australian dollar chart does not have these features. Instead, the Australian dollar is confined by a long term sideways trading band starting in 2016 April.

This is a non-trending environment and GMMA analysis is not a useful analysis tool. Instead, analysis is better applied using support and resistance levels and trend lines.

The Australian dollar weekly chart has a well-defined resistance level near $0.775. The $0.77 to $0.775 resistance level has been tested 8 times in the past 10 months. There is a high probability this level will again act as a successful resistance level with the Australian dollar developing a rapid retreat.

A second resistance feature is the upsloping trend line. The anchor point for this trend line is the low of $0.68 in 2016 January. The second anchor point is the low of $0.715 in 2016 June. This trend line acted as a support level until November 2016 when the Australian dollar plunged to $0.73.

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  Tuesday, 17 Jan 2017 | 7:34 PM ET

Chart: The dollar looks poised for a rally

Posted ByDaryl Guppy
100 dollar bills
Getty Images

The dollar index rapidly rose to nearly $1.04 following President Donald Trump's confirmation.

It has fallen steadily since and is now re-testing the $1.005 support level. This rally, retreat and retest activity is often followed by a rebound rally. The potential for a rebound has increased in the run-up to the presidential inauguration day and the immediate policy announcements which will follow.

The weekly chart provides better guidance to the support and resistance features on the dollar Index chart. The dominant feature on the weekly dollar index chart is the broad trading band between $0.93 and $1.005.

This trading band has dominated dollar index behavior since January 2015. Support near $0.93 has been tested four times. resistance near $1.005 has been directly tested twice. Lower level resistance near $1.00 has been tested five times. The move above $1.0005 was very important because it's a breakout from this prolonged 22-month sideways trading pattern.

The breakout moved to near $1.04 and is retesting the $1.005 level as a support level. A successful retest of support confirms the strength of the breakout. Failure of the support level will see the dollar test the next support level. This support level is created by the uptrend line starting from the low near $0.92 in May 2016. The current value of this support trend line is near $0.975.

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  Sunday, 8 Jan 2017 | 8:35 PM ET

Chart: Here’s why the outlook for oil is bullish

Posted ByDaryl Guppy
Pumpjacks operating near Ruehlermoor, Germany.
Getty Images
Pumpjacks operating near Ruehlermoor, Germany.

U.S. markets have been in a sustained uptrend since 2012. The election of President Trump has accelerated this trend in anticipation of a boost to the U.S. economy through proposed infrastructure spending.

But in truth, the U.S. economy has been growing steadily since 2012 although that wasn't enough to support oil prices which collapsed in mid-2014. The oil price did not reflect the U.S. economic expansion in this period. The price developed a recovery in 2016 but will this continue in 2017 or will the oil price fall again?

Chart analysis provides us with a methodology to understand market behaviour and set future targets. Chart analysis identifies trigger points which confirm when the market has taken significant steps towards meeting the new target conditions, or when the conditions have failed.

The long-term outlook for NYMEX oil remains bullish with initial targets at $58 and medium term targets near $68 and $72. These target levels are derived from two sets of chart features. They are: The long-term chart pattern and the history of support and resistance trading bands.

The first feature is the development of an inverted head and shoulder reversal pattern. This is a long-term trend reversal pattern that started in mid-2015 and which was confirmed towards the end of 2016. It is best seen on the weekly price chart.

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About Charting Asia

  • Daryl Guppy is an independent technical analyst who appears frequently on CNBC Asia. He runs training, analysis and resource workshops for retail and professional financial market traders involved in stocks, CFDs, warrants, derivatives, futures and commodities in China, Malaysia, Singapore and Australia. He has his own trading company, guppytraders.com.

 

  • Daryl Guppy is an independent technical analyst who appears frequently on CNBC Asia.