The Nasdaq's move above 5132 has sparked concerns that this would signal the end of an uptrend. But chart analysis suggests otherwise.» Read More
Markets start to incorporate news when it's just rumor and the information is quickly built into the price behavior.
This makes stock prices best summary of all the information that is known, guessed at, speculated about and suspected. However, this doesn't mean the price is absolutely 'correct' as it combines intelligence and ignorance, both of which are not always in equal measure.
Which, in a roundabout way, brings us back our chart focus of this week: Hong Kong-listed HSBC. The chart shows four technical features, all of which anticipated the bank's disappointing earnings report on Monday.
In the world of stock analysis, fundamental and technical analysis are on completely opposite sides of the spectrum.
Fundamental analysis is a method of evaluating securities by attempting to measure the intrinsic value of a stock, which means the study of everything from the overall economy and industry conditions to the financial condition and management of companies.
Earnings reports give a good idea of what the past looked like, and perhaps guidance to how the future may develop. For investors and traders the important question is related to the degree of room for future growth.
The question they ask is: what is the upside? When we compare the charts of Dell and Hewlett-Packard there are two very different answers.
Nintendo's earnings have held up relatively well given the damage Japanese companies have suffered from the financial crisis and the strengthening yen.
While the video game maker posted a 41% fall in its 9-month profit, it's still keeping its full-year operating forecast and raised its software sales target for its Wii console for the year ending March 2010.
Nintendo shares, however, haven't done so well. While the stock has rebounded in recent weeks, it's still lost about a sixth of its value over the past year, in contrast to the overall technology sector, which made a spectacular recovery in 2009 in tandem with the global economic recovery.
So what happened here?
The weekly chart of the Australian listing for Rio Tinto shows this has been a remarkably simple trend trade starting in December 2008 with the trend confirmed in March 2009.
There are times in the market when nothing more complicated than a twenty cent plastic ruler is required for making good money – or in more modern times, a simple charting software package and a straight edge trend line .
Toyota's stock is stalled at the traffic lights and has been for many months.
It's convenient to attribute the sluggish performance to the automaker's recent recall woes, but a closer look at the stock's technicals will show the downtrend's been in place for sometime now, although the stock did manage to break out from the descent somewhat last year to take on a prolonged sideways trading pattern.
If you Google ‘cause and effect’ you come up with a list of millions.
It’s a complicated subject, and the relationship between the cause and effect on the Google price chart is just as complicated.
It's convenient to associate the recent price pullback with Google’s current dispute with China. However, a closer look at its stock chart would reveal other technical factors at play, including Google's well-established historical resistance level near $600.
Chart analysis doesn’t concentrate on cause and effect. That’s for fundamental analysts. Chart analysis concentrates on understanding trend strength and identifying the trigger points which indicate the balance of probability has shifted.
Chip bellwether Intel kicks off tech sector earnings on Thursday, and analysts expect the chip maker to once again, surpass Wall Street's estimates.
Intel shares have already been riding higher in anticipation of strong earnings; the stock rose more than 8 percent over the holiday quarter, bringing total gains over the past six months to 30 percent.
The question is, how much more of a 'pop', or not, will the actual results provide the stock?
Historically, Intel has had a good record of impressive report cards, which is characteristically reflected in the company's weekly stock chart over the last two years.
After a terrible 2008, Indian stock markets came roaring back to life in 2009.
Foreign investors that roamed the globe armed with cash and in search of higher returns loaded onto Indian stocks, helping the benchmark BSE Sensex gain 81% for the year, making India the best-performing stock market in Asia; and the third in the world, after Russia and Brazil.
But as we enter 2010, with stocks becoming more expensive, and inflationary fears and asset bubbles forming in parts of the global economy, where are India markets headed?
With gains of more than 70% so far this year, China is the only global market which has showed a true and powerful “V” shaped recovery, epitomizing the return of investor confidence after a dud year in 2008.
I've indicated in an earlier blog that Western markets are increasingly mimicking the behavior of their Shanghai counterparts , with a lag of several months.
Therefore in order get further clues on where global equities are headed, it's worth looking at the China charts for clues.
There are four important features of China market development.
Daryl Guppy is an independent technical analyst who appears frequently on CNBC Asia.