27 Feb: Forecast: Stocks, Commodities

By | February 27, 2017


S+P: 2364

After trading a little lower through the Friday session US stocks clawed back their losses and closed flat on the day.

Technically, the dailies still point higher, so the ongoing drift to new all time highs could well continue this week as we head slowly towards 2400, with much depending on the outcome of what Donald Trump says when he addresses Congress on Tuesday. Technically, on the downside, support will again be seen at 2350/55 below which further support lies at 2330/35 and then 2320. I would rather not be involved at these levels although the slow squeeze higher looks set to continue and buying dips seems to be the plan. The 1 and 4 hour charts are now flat. Stand aside.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
2400 Minor 2349 Friday low
2390 Minor 2345 20 Feb low
2380 Minor 2331 16 Feb low
2370 Minor 2320 14 Feb low
2367 23 Feb high /All time high 2313 13 Feb low

DJI: 20776

Ditto S+P

24 Hour: Neutral Medium Term: Neutral
Resistance Support
21100 Minor 20694 Friday low
21000 Minor 20665 22 Feb low
20900 Minor 20601 21 Feb low
20850 Minor 20566 20 Feb low
20815 23 Feb high   /All time high 20505 17 Feb low

ASX SPI: 5703

The ASX traded heavily on Friday taking out the 5725 support in heading down to 5691, closing at 5700.

The 4 hour/daily momentum indicators are now aligned lower and so a test of the lows, and beyond, would seem possible, where targets will be 5680, 5665 and 5650. On the topside, resistance will be seen at 5725 and then at 5740, 5760 and the trend high of 5778.  If global stocks do continue to head higher, then above last week’s high of 5778 look for a run towards the 5789 9th Jan high, to 5800 and then to the May 2015 high at 5814. Right now this looks unlikely and the preference is to sell towards 5720/25 with a SL placed above 5750.

24 Hour: Prefer to buy dips Medium Term: Neutral
Resistance Support
5789 9 Jan high 5691 14 Feb low
5778 16 Feb high 5680 (38.2% of 5526/5778)
5760 Minor 5665 13 Feb low
5740 200 HMA 5650 (50% of 5526/5778)
5720 Minor 5622 (61.8% of 5526/5778)

GOLD: 1257

Gold had another strong session on Friday, finishing at session highs and at the best levels seen since early November, buoyed by the softer tone in the dollar.

Friday saw a run to meet the strong resistance at 1261, which has so far capped it, but above which could then see a run towards 1270, and possibly on to 1285 and 1300 at some stage. On the downside, support will be seen at 1245 and at 1236. As before, trading from the long side is mildly preferred but with a SL now placed below 1235.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
1300 Minor 1245 Minor
1292 10 Nov high 1236 23 Feb low/Daily Tenkan
1286 (76.4% of 1337/1222) 1230/27 Daily cloud top  / (23.6% of 1122/1260)
1270 Minor 1210 100 DMA
1261/60 200 DMA / Friday high 1200/1198 100 WMA /2 Feb low

SILVER: 18.36

Silver finally broke above the 18.20 resistance and headed to the major descending trend resistance, seen at 18.35, where it finished the week.

The short term momentum indicators still look constructive, hinting at further gains, while the dailies also remain mildly positive so we could yet be in for a move beyond the current resistance, towards minor resistance at 18.65, above which could then see a quick move to 19.00. On the downside, the initial support will be seen at 18.15/20 ahead of 18.00/17.90. This looks unlikely to be bothered to day, although if wrong further bids would appear at 17.80/75 and at 17.50/55. Buying dips is again preferred, looking for another leg higher although I remain cautious because of the chance of another dollar rally. Keep stops tight below 18.15.

24 Hour: Prefer to buy dips Medium Term: Neutral
Resistance Support
19.30 Minor 18.15 Friday low
18.98 10 Nov high 18.00 200 WMA
18.80 Minor 17.90/94 200 DMA /23 Feb low
18.65 Minor 17.75 13/14/15 Feb lows
18.35 Descending Trend Resistance 17.55 10 Feb low

OIL (WTI): 53.97

WTI was choppy on Friday, closing at 54.00 and leaving the outlook unchanged.

The short term momentum indicators are neutral but if we can overcome the 54.90/55.00 area we could head on towards 55.20, beyond which there is not too much to stop it heading 57.00 although this is a long way off at this stage. On the downside, support will be seen at the session low at 53.73 and then at the 22 Feb low at 53.35, at 53.00, and again at 52.70. Below there could see a run back to 52.00/51.70 although this seems unlikely. The momentum indicators are neutral and therefore a cautious stance is required. I mildly prefer the upside, but would have a tight stop placed at around 53.20.

24 Hour: Mildly bullish Medium Term: Neutral
Resistance Support
56.00 Minor 53.73 Friday low
55.21 3 Jan high 53.26 17 Feb low
55.00 21 Feb high 52.71 16 Feb low
54.91 23 Feb high 52.20 8 Feb low
54.48 Friday high 51.70 Minor