Will CBA break major support level?

Discussion in 'Stocks & Derivatives' started by Caput Lupinum, Sep 11, 2016.

  1. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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    CBA is on the cusp of breaking below $70 on Monday. If it closes below this level, it will be the first close below $70 since about July 2013. Good times :cool:
     
  2. finicky

    finicky Well-Known Member Silver Stacker

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    I'd have to agree a break looks more likely - the long negative monthly candles to the right of the $95 peak, the weak looking rally post Feb 2016, the strong volume bearish engulfing candle last month (Aug). It all looks like a malformed H&S top. Agree confirmed $70 break is 'key'.
    CBA can throw up surprises for a chart guesser though. Looking back at the second half of 2011 - I would never have picked that to immediately recover and go on for a 3 year uptrend.

    CBA 10 year Monthly
    [imgz=http://forums.silverstackers.com/uploads/1893_big_14.gif][​IMG][/imgz]
     
  3. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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  4. bilsen

    bilsen New Member

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    Well called down from here?????
     
  5. finicky

    finicky Well-Known Member Silver Stacker

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    A proper break hasnt happened yet, and the price yesterday met the level just below $70 on its low and recovered well. Made an indecisive candlestick. Similar thing happened in April and a short term rally ensued.

    However as noted, the trend is down now and the price has been contained in a descending triangle shape, which chart watchers view as a bearish pattern. Added to which, the claim that the bigger pricing pattern could be a multi-year 'head and shoulders' topping pattern which is assigned a very bearish probability if it 'confirms a break' of support which again is $70.

    Last night was a strong close for the American market, our futures would be up, and given the indecisive looking close yesterday for CBA at its support level it'd be surprising to see it break down today. If it crashes support against an up day for the index that would be extra bearish look for CBA

    Its quite interesting as you would think the market sentiment towards our premium bank would suggest something about the whole market?

    [imgz=http://forums.silverstackers.com/uploads/1893_big_15.gif][​IMG][/imgz]
     
  6. SteveS

    SteveS New Member

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    All this analytical stuff looks impressive and baffles the crap out of me, but is there solid evidence that doing all of this provides better returns than a simple, diversified share portfolio that's just left alone?

    By this I don't mean show me a few winners - that could equally be used to show some big gambler's system works - but if you compared a bunch of traders who do it this way with a few examples of 'static and unmanaged' share portfolios, how much better do the 'technical experts' perform?
     
  7. finicky

    finicky Well-Known Member Silver Stacker

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    So called technical analysis, which for me is 'chart hunches', is hit and miss. Nobody has to take any notice of it, its partly subjective, and for me i do it as a hobby and because i suck at fundamental analysis. I think investors who take no notice of charts are almost as mad as pure chartists. Buying and selling at the right price is important to most, but fundamentalists tend to dismiss charts and market sentiment.

    There are facts recorded on a price chart: highs and lows, opens and closes, volume. I would also class peaks and troughs, trendlines, support levels as facts, but maybe not. Why shouldnt these facts imply something about buyer/seller sentiment, and therefore about probable (not certain) future buying/selling?
     
  8. SteveS

    SteveS New Member

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    OK. I guess the question I am asking is, does active trading (using whatever method you choose, or a mix) produce better returns than simply buying a diversified portfolio and then sitting on it?
     
  9. bubblebobble2

    bubblebobble2 Well-Known Member Silver Stacker

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    Of course mate, FATCATs need their bonuses you know!
     
  10. finicky

    finicky Well-Known Member Silver Stacker

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    I dont know, and i am not flushed with recent success. See Doray DRM thread.
     
  11. BuggedOut

    BuggedOut Well-Known Member Silver Stacker

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    Yesterday could have easily been interpreted as bouncing off the support at $70 but I'd say today - most definitely - is a clear break below support.

    I'm a bit surprised CBA didn't sell off more savagely, though I guess a 1% drop in the context of a broader market bounce is probably significant.

    Are you going short now Caput? Personally, I am tempted but still hurting from the last time I took a speculative position on an Aussie bank and got burnt. Too much risk from insiders for me, but if I was previously holding CBA I would be out by now for sure.
     
  12. finicky

    finicky Well-Known Member Silver Stacker

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    Closed below $70, unpleasant outlook for holders. Not confirmed yet, and that depends on your choice of confirmation. I'd be feelling terribly uncomfortable if a holder.
    Happy days for parasitic shorters, *runs away*
     
  13. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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    Would like to see strong follow-through tomorrow on good volume. What happens overnight on the US session could determine that. I have a pending order in place on a short position. Hopefully it gets triggered tomorrow.
     
  14. finicky

    finicky Well-Known Member Silver Stacker

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    So how's this embarrasing discussion going?
    Nice high volume bullish engulfing weekly candlestick completed the week of discussion, followed by a positive one this week.
    Friday's close was $73.40, but the 'descending triangle' downtrend line is roughly at $76-77 and this target will get a little lower each week.

    CBA Weekly
    [imgz=http://forums.silverstackers.com/uploads/1893_big_21.gif][​IMG][/imgz]
     
  15. BuggedOut

    BuggedOut Well-Known Member Silver Stacker

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    What's embarrassing about it?

    Speculating on banks is a dangerous game. Very hard to beat banks at the game they are masters at.
     
  16. Bit Baron

    Bit Baron Member

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    With CBA now back above $73 I hope people took advantage of the dip and bought some more stock.

    Betting against a strong bank like the CBA is always very risky.
     
  17. finicky

    finicky Well-Known Member Silver Stacker

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    No-one bet against it. It was brought up and discussed as a possible short if it met a condition, which it didn't. I thought it would more likely than not confirm a break of $70, but it didn't. I would still be uncomfortable as a holder - a few strong closes above 76 should ease the danger, then a higher low (significantly above 70) would look better. Even then it will look like a vulnerable price chart for some time imo.
     
  18. BuggedOut

    BuggedOut Well-Known Member Silver Stacker

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    Could be a good day to short CBA.

    Yesterday's close was 73.50, comfortably off the support at 70.00 but with potential contagion across the sector from Deutsche Bank (already affecting US financials) the risks may be underestimated by the markets here in Aust.
     
  19. finicky

    finicky Well-Known Member Silver Stacker

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    CBA 5YR WKLY
    CBA 5YR WKLY.gif

    CBA arguably back in the vulnerable zone. Is in a downtrend on the weekly chart.
    The descending triangle pattern, previously mentioned over a year ago, was broken to the upside. A strong rally followed which sputtered out and gave way to the current downtrend. The previous head and shoulders pattern was never activated by a break of the neckline. Are these bearish patterns now irrelevant? Maybe they are like the malaises people recover from but lead into the real sickness. Cheers.
     

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