Global shares markets shrugged off Dubai World worries and resumed the risk rally Tuesday, with Asian markets leading the charge. The advance continued until Friday, which saw some profit-taking. For the week, the S&P/ASX gained 2.9%, and the MSCI Asia Pacific Index surged 5.5%, its steepest climb since early May.

With earnings season wrapping up once again, fundamentals and official rhetoric are taking centre stage. Australia’s shares markets are most likely to be affected by the November jobless and business confidence data, and October trade balance numbers.

Possible shakers next week include:

Tuesday, 8 December: BT Investment Management (BTT), spun off from Westpac and still mainly owned by them, in October reported a profit decrease of 11% year over year. However, funds under management increased 2% during the fiscal year, mainly in the second half, and company officers affirmed increasing positive momentum in financial markets. The stock BTT has not yet been able to successfully breach resistance at 3.30 and will need to build some momentum of its own to accomplish that feat.

Wednesday, 9 December: Bank of Queensland (BOQ) in November reported reasonable results, with retail deposits increasing by 16% year over year, after tax profit by 2%, and net cash after tax profit by 21%. The bank is currently pricing a 2013 bond offering, where it will pay more for a government guarantee than the Big Four due to its smaller size and subsequently lower credit rating. The stock BOQ has broken beneath its bullish trendline, which held from March’s low of 6.23 to October’s high of 13.41, and has most recently set a series of lower highs and lower lows.

Meanwhile, AGL Energy, when last analysed on 23 October, traded within a narrowing consolidation triangle, with the price action at that time having touched and respected the upper trendline. As anticipated, the price action then retracted to the lower trendline, where it bounced from support on 5 November at 13.43, as shown on the chart, below:

At this time, the price action of AGK continues to consolidate within the triangle, rising back toward the upper trendline. This stock seems particularly well suited for trading with a slow stochastic as a technical indicator. As shown on the illustration below, the crossing of the %K and the %D lines clearly signalled the sell and then the following buy:

technical analysis by Craig Liles

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