NAB – A Price Forecast

Aaron Lynch and I have just finished the final Interactive Trading Workshop for this round, in Brisbane. These workshops proved a tremendous success with our traders. During the Brisbane workshop as a group we came across a potentially, highly profitable set-up on the monthly chart of NAB. Emphasis at the seminar is placed on using as many current market examples as possible while learning new trading techniques. This is how we came across this particular set-up.

One topic we investigate is the basis of calculations for constructing a price forecast. The Ranges Resistance Card is an invaluable tool for construction of a price forecast. Through the Software, this resistance card is easily applied, using the Gann Retracement Tool. In Chart 1 I have a monthly bar chart showing the history of NAB. The all-time low for NAB is $2.45 and the all-time high is $36.78. This historical major range is the strongest, long-term Ranges Resistance Card for any market.

As you can see the 25% retracement level calculates out to be $28.20. The range is $36.78 - $2.45 = $34.33. Now find 25% of $34.33, which equals 8.58. $36.78 - $8.58 = $28.20. This is the first of our pressure points of interest.

In Chart 2 I have another monthly chart of NAB taking in the market action from late 1999 to present. There was a monthly, cyclic low in February 2000 at $19.88. Using this low to construct a Ranges Resistance Card with the all-time high would also prove valuable. This is an example of how the concept of wheels within wheels can be applied in your analysis.

The 50% resistance level for this card calculates out to be $28.33. This is the second of our pressure points of interest. The final pressure point we looked at in this study was from the Lows Resistance Card. As mentioned the all-time low for NAB is $2.45. Percentages of this low also provide us with Pressure Points to watch. 1150% of $2.45 calculates out to be $28.18. The average of this cluster of Pressure Points is ($28.20 + $28.33 + $28.18)/3 = $28.24. Now this is where it gets very interesting. NAB has just confirmed triple bottoms on the weekly chart. It is not your classic bull market triple bottoms as the top preceding each of the bottoms is getting lower. However that’s not enough to discount this as a potential bull market set-up. The average of the triple bottoms is ($28.36 + $28.53 + 28.51)/3 = $28.46. The fact that these lows are pulling up above the Pressure Point can be interpreted as a subtle sign of strength. This example reminds me of the set-up on BHP last year, which I highlighted in Trading Tutors Issue #9, which you may be interested to review.

NAB needs to break the last monthly swing high before it could even be considered into blue-sky territory. To trade this set-up you need to go back to your daily and weekly Swing Chart trading rules for your entries and exits. Another advantage for those who attended the workshops is the time we spent on Advanced Swing Trading techniques. If NAB breaks to the downside, through these lows and maintains a minimum of two weekly closes below the triple bottoms, the whole game changes. Watch out for rampaging bears. Time will tell but one thing for sure is that how much a trader makes out of this set-up, will be proportional to their skill. Chances are NAB is going to be very lively soon.

Until next week......

Noel Campbell