IFC Markets - Analytics

    IFC Markets

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    Technical Analysis PCI : 2015-05-26

    American stocks pullback

    We present you the new Personal Composite Instrument &Technology_Stocks. It reflects price dynamics of 10 largest American IT companies' shares: Amazon.com, eBay, Facebook, Google, Yahoo, Cisco System, Intel, Apple Inc, International Business Machine and Microsoft. The portfolio is quoted in USD. In 5 years it has shown more than 100% growth. From the beginning of the year the Technology_Stocks instrument has gained 4.4%. It didn't increase as much as American hi-tech NASDAQ 100 ( 5,8%) but outran S&P 500 ( 2,4%) and DJI ( 1,4%). American stocks have recently dropped due to the strong dollar. Market participants are concerned that probable rate hike will add to corporate loan exposure, while the expensive dollar may make companies' products less competitive.


    On Thursday the &Technology_Stocks daily chart broke down the uptrend support line. It escaped the triangle pattern and crossed the latest fractal low. Bolindger Bands have not yet expanded, indicating that low volatility may sustain. Parabolic has not pulled back so far. However, MACD indicator has been forming a sell signal. Its bars are located above the zero level but below the signal level. RSI-Bars have been moving down, demonstrating descending divergence. It has gone below 50 but has not yet reached the oversold zone. We do not rule out further bearish momentum; a sell pending order may be placed as soon as the price breaches another fractal low and the latest Parabolic signal at 108.3. A stop loss may be placed above the latest fractal high—111.6 or at the upper Bollinger band—112.2. After pending order activation the stop loss is to be moved every four hours near the latest fractal high, following Bollinger and Parabolic signals. The most cautious traders may switch to the H4 time frame and place a stop loss, moving it after the trend. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price reaches the stop loss without triggering the order, we recommend to delete it: the market sustains internal changes that were not considered.


    Position Sell
    Sell stop below 108.3
    Stop loss above 111.6 or 112.2

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