Consolidation or Opportunity? Trend Changes March 2010

By Dave McLachlan

Another great week on the markets, with a few more trend changes coming to light.  While the FTSE is rallying nicely (see the last two Market Watches for a full run-down), the ASX Top 200 and Dow Jones are continuing to tread water.  But does it mean we should be sitting on the sidelines, or is this an opportunity in the making?

The fact is – while the ASX Top 200 has formed a correction lately, it failed to confirm a bear market according to Dow’s Theory.  While the ASX Top 200 is consolidating in a 10% range, individual stocks are continuing to give entry and exit signals.  I guess that’s what keeps it so interesting – there is always something going on in the market, whether it is trading sideways or not.

If we wanted to narrow our search  down further for stocks on the move, we could determine the best places to invest by looking at the relative strength of the different sectors, and investing in the strongest ones.  This is also one of the methods used by William O’Neil, and Oliver Ward from his recent speech at the ASX seminar, but more info on that tomorrow.

For now, here are the trend changes:

Looking at the big ones – in the ASX Top 20 we have WBC and ANZ re-confirming their up trend, and Brambles (BXB) making a Dow Theory entry and heading upwards once again.  As I update them I will include their win percentages and profit to loss ratios over history for your information also.

Since last week, QBE has continued to tank after making a Dow Theory exit signal, and CSL has continued to head upwards after its trend line entry.  For the full list of research, click here.

Happy Trending!

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March 6, 2010  Tags: , , ,   Posted in: Market Watch Weekly

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