EUR/USD : Reversal Day ?

Shooting Star Bearish Reversal pattern appeared yesterday on EUR/USD chart : A strong push to nearly 1.21 and a move back to below opening level. This bearish pattern is especially significative when coming after a strong push which is the case here . The pattern would be negated should EUR/USD close back above yesterday’s high i.e. 1.2070.

SocGen, UBS , ING, Credit Agricol ,.. on what’s next for EURO

Shooting Star explained

 

 

“Surprise! Shares of IBM Can Rise 35%” as per Morgan Stanley analyst – Barron’s

 

IBM was just a source of disappointments to his sharehoders in last months ( and years). MS analyst says there are 3 reasons to buy the stock now : 1/ Stock is cheap 2/ Dividend of 4,2% is high 3/ Reasons which pushed stocks down are losing steam : The long shift process from hardware to software and from local machines to cloud is coming to an end and so pressure on revenues which for a part was voluntary, margin and profit. Huge investments of above USD 30bln into Cloud, security business, social, mobile and analytics will start to bear their fruit.

IBM’s stock has lost 33% from USD 179 february top to recent bottom at USD 139, an underperformance of roughy 40% versus SP500. Time to catch up has come …

Technically 1/ IBM’s stock price bounced from the USD 135-140 area  2/ Trend via MACD daily shows a reversal  3/ One can see a positive Price/Momentum divergence on chart     …  Chart Here

I bought stock at Opening yesterday just above USD 143.

Link to : Barron’s on IBM – August 23rd

IBM Vs SP500 – Last 2 y

 

 

EURO : Next – big – threat ? Berlusconi is back !

Talks of parallel currency gets bigger again in Italy after last weekend Berlusconi interview.

Following Citi , more than 2/3 of italian voters would support anti EUR parties.

The 3 right & centre rights parties will finalise a common program in september likely including parallel currency project.

Risk of Italy (even if low) going this way totally underestimated by FOREX markets but Italian Bonds have started to react negatively  with Bund/BTP spread  up 20 bps in the last week.

 

See more details in  FT’ link here below :

https://ftalphaville.ft.com/2017/08/21/2192571/parallel-currency-talk-gains-ground-in-italy/?ft_site=falcon&desktop=true

 

Italy + ECB obviously not wanting to see EURO above 1,20 + ECB potential tapering discussion in september already in EUR price + more dovish Fed priced as well = EURO/USD  to correct from current 1,18 to 1,20 range is becoming more and more likely.


 

 

Gold Miners ETF (GDX) : Breakout above USD 23

 

GDX recently broke the down trendline (purple) above USD 23 . This could prove to be a strong signal as long as above USd 23 prices are maintained and Gold prices also ends with cleanly breaking the USD 1300 level ( 3rd test since April).  Continuation of US equities market – so far tiny with SP500 down 2.50% – correction initiated 10 days ago might be the trigger for Gold finally surpassing the USD 1300 key level.

Short term, flattening 50 days and 200 days MA + Purple TL will act as support in the USD 22-23 area.

 

 

GDX (Right Scale) vs Gold Price (Left Scale)

 

 

Alibaba : Ongoing Reversal

Alibaba Group Holding (BABA) – Aug 3,2017 – USD 153,32

 

Chart Here

 

2017 strong move from USD 85 to USD 160 is overdone and reversing as witnessed by Price momentum divergence.

Long term trend is intact as long as BABA stock price does not cross trough USD 110 (2016 +trend an 200D MA).

Buy in the USD 115-125 zone, i.e Blue lines on chart : At USD 125 May gap would be closed and USD 115 matches with long term trend and 200 days MA. Buy zone is 25% lower than USd 160 top which might look irrealistic . Actually it is not considering the 3 top to bottom moves since BABA was first quoted in NY in 2014 : -50% in 2014/15 , -30% in 2015/16 and -22% in 2016.