On Wednesday, ahead of the US Federal Reserve shedding light of the timing of the tapering of asset purchases, global equities traded in positive territory, with gains seen across the board. Following the announcement that the Fed may soon taper, markets continued to rebound off Monday’s lows, with the S&P 500 index adding 0.95%, the Dow Jones Industrial Average and Nasdaq adding 1%, while the range-bound Russell 2000 was higher by 1.52%. The recovery in equities were also driven by some ease around Evergrande’s promise to pay some of the bond interest payments due on Thursday which has seen Asian rebound off it’s lows and with the advance continuing into Thursday’s trading session. On Wednesday, commodity prices have also moved higher, with Copper Futures advancing by by 3.4% (however remains range-bound), Platinum up by nearly 5% following yesterday’s +4% advance, Palladium higher by 7.1% while Brent Crude Oil added 2.06% as it broke to the upside of a 6-day range. Supporting the recovery in Asia, was news that the PBOC has injected CNY 120bn into the banking system following the injection of CNY 90bn a day earlier.
Below, I’ve highlighted a few charts of how I’m seeing things at present and where the potential opportunities may be.
USDZAR – retracing from 61.8% Fibonacci level. Potential retracement toward the 50-EMA (near R14.55), which may act as a support area.
Platinum – Rebounding and finding resistance at it’s declining 50-EMA. The price trading within a strong congestion zone, just below the pivot.
Palladium – Rebound off the horizontal support area. Resistance expected $2193 – that being the prior breakdown level.
Brent Crude Oil – Holding the prior breakout level. We saw saw a back-test of the trend line breakout, with the price holding the 50-EMA. Among it’s commodity sector peers, it has been showing relative strength. A break below 74.51 negates the current, short term positive outlook.
Mondi Plc (MNP) – Found support on the incline. Has spent two days consolidating in a small range, with a double inside bar relative to Monday’s -4% decline. Potential lift (continuation) off this trend line to target the R395 level.
Redefine Properties (RDF, 468c) – The share showing relative strength versus the broader market, holding near it’s 18-month highs and looking to break out. Base just above it’s 200-day moving average.
Richemont (CFR, 15599c) – On 200-day however an unfilled gap remains around the 14776c level. Prior short level above 18700c (27 July).
U.S. Global Jets ETF (JETS) – Potential for this head and shoulder to fail, creating an opportunity on the long side. “Technical patterns have the potential to fail however recognizing a potential failure could create an opportunity.” Clearing $23.75 sets up the buy/long.
DraftKings (DKNG) – A recent long trade idea (beginning July sub-$50, traded +$63) and another opportunity to buy with price nearing a short term level of interest. Has retraced near it’s 61.8% Fibonacci level. Sharp pullback during Tuesday’s session on the back of it’s $20bn bid for Entain.
Macy’s Inc (M), $22.57 – Back-test & rebound following a substantial volume breakout post it’s recent earnings release. Price held pivot above a rising 200-day SMA.
DLocal (DLO). Nasdaq-listed Latin American E-Commerce business. Technically, the stocks has been in a low-volume consolidation phase following it’s high-volume earnings breakout. Volume seen picking up on Friday, Monday and Tuesday. We have potential for a gap close and shake-out below the 50-EMA before a break of the post-earnings downward trend line to continue the upward trend.
FuelCell Energy (FCEL) – Big volume coming into this stock, which has been an under-performer YTD following a strong performance during 2020. The spike in volume is encouraging. Weekly Chart sees price rebounding off the 2019 incline support.
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