Zone trading and CSL

This post updates one  written on April 26, 2018 that was bullish for its prospects.

Some six months later, the 12 month daily candlestick chart shows that the optimism expressed was well justified. with the share-price not only reaching the suggested $200, but exceeding it to reach a high of $232.23 on 3 September 2018.

CSL Nov 18

It would in retrospect have been ideal to have exited at about this level, but realistically from a technical viewpoint, a more prudent exit signal was given on the 6th September when there was a $10 fall in the share-price to $217.16 causing the Parabolic Indicator to switch from an upwards to a downwards trajectory.

As is often the case, a large range fall in the share-price in the wake of a sustained uptrend is often a harbinger of further falls. The further chart of CSL 5/11/2018 adds a Fibonacci retracement trace, showing retracement to the 61.8% Fibonacci level at $175 before rebounding.

CSL Nov 18 b

Investors with an interest in Technical Analysis will note that today’s negative candlestick appears to be a turning point from $192 forming a lower high, with the possibility of further falls.

For a majority of the past year CSL has traded in Zone 3 between $167.80 and $200. My assumption is that in the absence of further sensitive news releases, this is likely to continue.

A scenario which I would find most bullish would be a rebound off support at $167.80 which broke out above $200 into Zone 4.

Readers of this post are reminded to always seek guidance from their stock-broker or other qualified financial adviser, and to not rely on Technical Analysis alone.






Categories: Chart Analyses, Trading opinion


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