Dragonology, a study of charts by Dragon

 

FROM Wikipedia:

Dragonology is the title of several books, a modeling kit, and a board game released in 2006. Dragonology is mainly about summoning a dragon and learning the secrets of dragons.

The Greek suffix LOGY means ( a suffix meaning: to talk, to speak; any branch of knowledge; any science or academic field that ends in -ology which is a variant of -logy; a person who speaks in a certain manner; someone who deals with certain topics or subjects)

The word -ology is a back-formation from the names of certain disciplines. The -logy element basically means “the study of ____”.

Hence, Dragonology in Finance Manila is where I place the charts that I study.

 

I said I’d return with some charts and analysis when I saw some clear patterns emerging, and when I was no longer über preoccupied with a WHOLE lot of life’s personal challenges which I had to tackle this year.  Don’t worry, they were all pretty much solveable but came in bunches like Pacman’s punches and was enough to keep this Dragon out of fire.  Hope you enjoy my yearend picks!

 

MARKET OUTLOOK CHANGING

There is still no immediate solution to the Eurozone crisis, but markets and analysts are almost in agreement that they have staved off certain death and kicked the can until next year.

The American economy, on the other hand, has shown more and more signs of improvement in terms of consumer sentiment, lesser jobs lost, more houses sold, and slightly better manufacturing data.

With this, we raise our conservative outlook to an increased weighting in equities just in time for the seasonally strongest months of the year: The December Santa Claus rally, Window Dressing (read our 2008 article on this), which leads all the way to the January effect (Q1 rally) (also wrote an article on that).  After that, we reassess.

For now, let us eat what is served to us on a silver platter.  Many charts are confirming breakouts left and right, and wether this is a temporary halt to the downtrend and the creation of a longer uptrend one, regardless of which, there is money to be made.

 

MEG DAILY CHART

Very early in the game was MEG’s attempt to break out of its prolonged Descending channel.  A text book breakout last November to 2.08 took it to a textbook retest of pivot support, and we are now consolidating at that level.  Upside for MEG, should the whole market rally anyway, should be at 2.08 or 2.25.

 

DMC DAILY CHART

This one seems to be the favorite of our resident Sergeant Desert Storm.  DMC made an impressive move last Friday.  The frenzied move was made with volume, which is what is needed to break out of the descending channel.  Chicken feed target for such a move, should it continue, is 42, then 46.

BEL DAILY CHART

Like MEG, the BELLE rang early in the rally, and is just about nearing the finish line for this leg.  BEL already broke, and Deutsche still gobbling up shares.  5 will be done in the blink of an eye, and we have maybe 5.18 maximum before BEL rests.

There are many similar breakouts about to be made from their descending channels, which depicts the overall behavior of the market.  Such stocks locked in a similar pattern are: ALI AGI, and some other are simply near their downtrend resistance levels like GERI MBT FPH.  So go take your pick and good luck in our last few trading sessions.

Image

LC DAILY CHART

In our forum last night, we already gave a teaser of some good things to come.  The chart bars encased in the box are merely a simulation of LC in the coming days.  This movement may take a healthy ideal duration of 8 to 10 trading bars(days).  Seeing this 2.20 merely coincides with the rumors I received that LC (or B?) might close at 2.50 by this year end 2011!  This is still on the heels of Goldfields finding estimates 3 to 5 times bigger than initially thought, and on the momentum of that mysterious buyer cornering all the shares.  Charts usualy are a prelude and precedes any news reports that may affirm a pattern’s move.  The pattern above is a self explanatory ASCENDING CHANNEL.

So LC may not reach 2.50 asap, but this is the A shares chart,

MA DAILY CHART

I’m sorry to dissapoint you my friend TMAC, but there is no clear pattern for Manila Mining, except it is in consolidation.  No clear accumulation going on for now, and it seems like distribution.  Fear not, get hope in the dynamic fluidity of stocks!

ZHI DAILY CHART

For another forumer’s request, Let’s go over to that other Felipe Yap (who is a sport, by the way, as our forum has coined him the name LOLO the past few years and it stuck) stock which is Zeus Holdings.  Last July 2011, ZHI was rife with activity as traders got wind that Mr. Yap owns another listed mining firm.  Wether or not he has any Mining Permits to be approved or rights offering to be issued, the chart show a big move coming very soon.  Initially, the smaller pattern illustrates an ascending triangle.  We got maybe until December 22 until ZHI decides if it will break out of the .90 resistance or not.  In other words, between now and a week or so, ZHI might trade in a tighter higher low range all the way until ejaculation point of a possible .90 breakout.  It’s 1.20 after that.

I hope it’s not the same characters playing the ZHI shootout if a breakout comes.  We need something else to change the formula.  Regardless, back to the charts.  RSI points to a continuing uptrend pattern.  And the whole of ZHI chart is trading on support of that 6 month uptrend.  In fact, buying ZHI now seems to be like buying LC when it was at 1.22 only last month, sitting precariously on the support level of an uptrend.  Bollinger bands are on narrow mode, hoping to widen on the upside.

 

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