Starting with some financials, Citigroup and Bank of America look ok. I’m bearish on both in the immediate short term, particularly C. BAC looks really stretched at the $34 mark, and I think it is trying to establish some range trading potential between that and $28 in the short term. However, depending on oil news etc leading into Monday, it could easily rally past this, and if it does it should be quick and relatively sizable.
Bank of America (BAC) 15 min chart:
I’d like to see a pull back from this, that’s what I expect. It will be interesting to see if it pulls back to the support at $28, or if it hits this trend line it could be trying to form. I would be bullish on the trend line as it would form an ascending wedge, which is a slightly better indicator for me. The $6 channel is very exploitable for profits, however we could see some big gapping this week.
Citigroup timeframes on the 5min and 15min both indicate a drop on Mondays bell. 5min chart is consolidating in a clear range as shown by the first chart. Looks stretched here after a nice explosion, good shorting opportunity but be wary of a sharp move off the MAs and over the $19 mark.
The 15min chart is probably a little better to look at in terms of support resistance ambiguous line at $19 (prior support new resistance). These are why I think C will drop off on Monday morning and then perhaps rally later in the day depending on news. C is forming a wedge on the 15min chart which is something to look out for, as it is fast approaching decision time.
Tesoro is a chart I haven’t analysed for a little while, so I’ve just drawn in a quick few lines. I really rate TSO as a tradable stock as the movements and patterns are really crisp across most timeframes. Here’s the 5min chart first, similar to C‘s 15min chart, where $15.4 is a key level at the moment. Nice wedge forming here and we could see some nice action in this on Monday, depending again on oil and gas geopolitical events etc.
Clear as day descending wedge on the 15min chart here back a few days now. Strong support in the $15 area, but it has wicked down once to $14.80 so watch out for traps. I’m looking to trade this through the week as these patterns are very good for either-way trades therefore I will react to the events as they happen instead of declaring myself bullish or bearish here.
Elsewhere it is a huge week for RBS as they report earnings on Friday. It should be a horror show if anyone else is to go by (HBOS, Alliance Leicester..), however the market will no doubt do the opposite we expect with RBS. Should provide some nice scalping in the lead up to Friday, but could be a very very risky play holding into earnings on either side.
Volkswagen looks nice off the €194-6 area for a long. British Airways jumped the to I think a 4 month high briefly on Friday on acquisition news, I traded the jump but didn’t short it back down. the 196-260 channel is a slight more expanded now to about 275 – but I will wait for some re-testing action there.
Otherwise it should be a fairly straight forward week.
I have started coverage of EasyJet (EZJ) on the basis of an excellent 10 minute chart. Also adding Wachovia (WB) and Alcoa (AA) to the list. I have removed Transocean, Time Warner and Microsoft on the grounds I never trade them and hardly even check their charts.