OGT Newsletter (Issue No. 1)
Dated 5th May 2012
In this issue, we will be discussing on a couple of indices, a few currency pairs and lastly, half a dozen of US stocks.
The 2 indices in focus are FTSE 100 index listed in the London stock exchange and the Hang Sang index listed in Hong Kong. The 3 currency pairs in focus are CAD/JPY, CAD/USD and GBP/JPY. The 6 US stocks in focus to buy are CCMP (cabot microelectronics), INTL (international asset holding corp), LANC (lancaster colony corp), NATL (national interstate corp), SGA (saga communications), MCD (McDonalds Corp). The US stocks in focus to sell are BKD (brookdale senior living inc), DRIV (digital river inc).
As global markets are more or less affected by the US markets, we will also give an overall view and analysis of the US markets as a whole. Based on our technical analysis, the US markets are already in an uptrend correction and the next leg of correction is starting soon. And it is highly possible to happen on the week starting Monday 7th May 2012. The S&P may test the recent lows and resistance level of around 1350. And it is likely that it will be broken, to go down further. Traders looking to sell short the indices or e-mini S&P futures, should target a limit profit below this resistance level. However, if it does not break this resistance, traders should get out of the trade entirely and wait for other better trading opportunities.
The FTSE 100 is actually almost the same as the S&P as the FTSE do follow closely the movements of the US markets. However, there is a big difference between them based on technical analysis. Base on the charts, unlike the US markets which is in an uptrend correction phase, the FTSE is actually just starting to resume its long term downtrend after a downtrend correction. Therefore a word of caution is to never buy and go long on the FTSE (at least not for another quarter) till the long term trend changes. Based on our analysis, the FTSE will continue its downtrend and it may be a long leg this time. Our near term target will be around 5500 and eventually to test 4900.
We are of the view that the hang sang index is being over bought and indicators suggest this. Therefore, we will be looking for triggers and selling opportunities on the hang sang index or futures based on our OGT trading system. Technical analysis shows that it may still go up a little before the trigger comes. However, it may come without it moving further up as well. The trigger may not even come at all and the index may keep moving up. But we will be on the lookout for selling opportunities for this index or futures.
Next on focus are the 3 currency pairs CAD/JPY, CAD/USD and GBP/JPY. Recently, three of them have similar chart patterns and actions. All three indicate shorting opportunities. In fact, traders should already have been into short positions on these pairs this past week. We are of the view, based on the charts that the Japanese yen will strengthen further against major currencies. Based on the charts also, the pound looks likely to weaken further as well. Same goes for the Canadian dollar. We at OnlineGuruTrader.com (OGT in short), posted our trade alert based on our OGT trading system on GBP/JPY on 3rd may 2012 which is a couple of days earlier than today’s newsletter. You can check our post dated 3rd May 2012 on our homepage
Next on focus are the 6 US stocks to buy and they are CCMP (cabot microelectronics), INTL (international asset holding corp), LANC (lancaster colony corp), NATL (national interstate corp), SGA (saga communications), MCD (McDonalds Corp). Indicators show that CCMP may be too over sold and a rebound is very likely to happen so that it can resume it long term uptrend. Meaning, its correction is almost over. Moreover, if this does not happen, its long term uptrend will also be threatened. Therefore, there may be buying opportunity provided its recent low of 32.80 is not broken. Non traders can look to buy near that level to minimize losses. Traders as usual, please wait for triggers in your system before going in. The 4 stocks INTL, LANC, NATL and SGA show similar characteristics. All seems to be oversold and bottom out and ready to resume its uptrend. In fact, it may have already started. Therefore as traders, we will look and wait for pullbacks and follow our system to get into the trade if any. MCD has a strong long term uptrend. Recent correction and retracement provides trading opportunities for us to get into the trade. As long its recent low of 94.13 is not broken, traders should look for triggers to go in to go long. Due to the fact that our analysis of the US market as a whole is a bearish one, the above stocks to buy may take longer to yield profits or may even yield losses. This is because in an overall market that is bearish and when it’s underlying index is doing down, most of the time, more than 50% and up to 80%, sometimes even 90%, of the stocks in that market will go down.
And because of our analysis of the overall market as a whole, we prefer to short stocks. The US stocks in focus to sell are BKD (brookdale senior living inc), DRIV (digital river inc). Both BKD and DRIV are long term downtrend stocks. They have enjoyed a brief run of correction from their downtrend. And based on the charts, it shows that both of them are ready to resume their downtrend. In fact, DRIV is already being traded based on our OGT trading system on 16th April 2012. And it has returned profits of $604.00 after it hit profit target on 4th May 2012. You can check our post dated 16th April 2012 on our homepage