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Once the giant of investment banks in Australia, Macquarie has recovered from its 2011 lows of around $20 to nearly double to approximately $40 in recent trading sessions. The pattern we see in Chart 1 is exciting for both the bulls and bears. A triple top may signal a decline or, if the price action breaks out and the resistance is broken, some significant upside.
The three highs have struck decent resistance and the price action at the time of writing (1pm, Thursday 21 March) rests around $36.70. For those on the ball, the current up day signals a potential ABC short pattern.
Chart 1 – Daily Bar Chart MQG
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W.D. Gann’s rules suggest that markets break support on the fourth time they are tested. While upside potential is not out of the question, we would need bullish support around these levels to suggest it can retest the resistance.
Chart 2 shows the bigger picture and 50% of the range of the 2009 high to 2011 low is holding the market. In terms of time, the top to bottom range was approximately two years. The current run up to the seasonal date of 21 March is 542 days, or 75% in time.
Suffice to say there are quite a few issues to keep you on your toes here.
Chart 2 – Monthly Bar Chart MQG
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Chart 3 also provides a case for upside resistance with the lows resistance card of 2011 at $19.94 holding the market at approximately a 100% repeat.
Chart 3 – Daily Bar Chart MQG
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Chart 4 demonstrates the importance of Milestone theory from David Bowden’s roadmap chart. The 150% level has proved its worth time and again as a big picture tool for resistance points.
Chart 4 – Daily Bar Chart MQG
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Chart 5 displays time frames in calendar days from the lows in 2011 and 2012. These time frames (while not exact) are interesting when compared to the previous moves.
Chart 5 – Weekly Bar Chart MQG
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If you are comfortable with applying angles, you will find there are also a number of exciting third dimension studies to consider in the current phase of this market.
I, for one, will be stalking Macquarie over the coming period.
Good Trading
Aaron Lynch |