S&P/ASX 200 Index gained in the week, rising to a 15-month high as investors and traders emerged from holidays and looked for trades. Such a positive start to the New Year often foretells a good trading year, with the U.S. stock markets following that pattern in 84% of the years since 1950.

The ASX200 and All Ords bid fair to break the psychologically important 5,000 level in the next week or fortnight. Much of the final push is likely to come from resources and energy names, as traders seem to be concentrating on commodities including crude oil and natural gas due to the record cold temperatures across much of North America.

Possible shakers next week include:

Energy names, such as Woodside Petroleum (WPL), with oil and gas production set to double within two years; Origin Energy (ORG), diversifying into hydrocarbons from its power generation, and retail gas and electrical sales; and Australian Worldwide Exploration (AWE), a midcap with a strong cash position. Watch for appreciation here if crude oil climbs higher.

Also watch related engineering names, such as Decmil (DCG), which holds a strong cash position plus contracts with both Chevron and Woodside near Pilbara; and Monadelphous Ltd (MND), which has climbed from a low of 5.25 to a current price of 15.00 and so is trading at a premium with others in its category.

If the global financial system holds steady and the week holds no scares, look for gold to consolidate near its current level, just beneath resistance at $1,140/oz. That would slow the growth of gold mining companies, such as Newcrest Mining (NCM) and Lihir Gold (LGL).

Meanwhile, BlueScope Steel (BSL) broke briefly beneath support at 2.85 and in doing so touched and established a new uptrend, as shown, below:

Watch for BSL to consolidate within this new triangle, beneath resistance at 3.40 and the bullish trendline. As the tip of the triangle narrows, the chart will require further analysis.

With resistance at 40.00 soundly broken, BHP Billiton (BHP) continues climbing along its steep uptrend toward 47.75, which will complete the forming head and shoulders pattern, below:

The long-standing resistance at 40.00 has now turned to support, as illustrated by the retraction to 39.98 on 14 December:

BHP remains a buy until 47.75 is reached.

technical analysis by Craig Liles

Popularity: 7% [?]