SANOFI

The beginning of april gave some strong bullish signals. One of them occured with the sanofi´s stock. The conditions were one every timeframe bullish. I opened the position on the 1 of april at 93,46€ and it got closed due the stop order on the market opening of the 16th of april due an gap down at 97,39€.

A couple of trades

These trades were rather following a position trading strategy since they were kept through several days. The first one was traded with the BNRGn (Brenntag Ag). Open at 53,53 and close at 55,16 with a 163 point difference. The first picture illustrates the instrument on the daily chart. We can see that the price had just recovered from a minor drop and the trend is strong bullish. 

 BNRGn (Brenntag Ag) on the 15 minute chart where the trade was executed. This is  one of those trades where I placed the stop order just right. The price started oscillating with high volatility just after the position was closed on the 17th of march. Green line entry, red line exit. 

 The second trade was executed also with a stock derivative of the German market. G1AG (Gea Group) Firstly the daily chart, then the 15 minute chart.

 The picture does not quite show that actually the the first low in the picture is many points below the second (higher) low. This observation made me trade this movement. The exit was executed with a market order, since the stop was  lying down at 43,90 and the instrument started showing reversal signs on the 17th ( a reversed 1-2-3 pattern).

Where the first two trades were long positions, the third was held short. This was exercised with the CHK (Chesapeake). This stock has been extremely bearish since the middle of 2014. The position was entered at 15,04 where the price broke through the last low. The 15 minute chart illustrates that the entry point had clearly some bearish volume, since the price plunged immediately. The position was closed manually with a market order due to a possible reversal. A 103 point trade. 

Oil

Everybody is aware that oil has been falling like crazy lately, but nobody seems to understand why it has been increasing in value rapidly last week. Many are speculating the price will hit 30$ per barrel this year. Other say it will hit 200$. I do not care for the fundamentals as long there is a trend in tact. For me the trend is still bearish on the long run and I would prefer to sell rather than buy. Some possible short positioning illustrated below:

BRENT CRUDE OIL x 100 1H  CHART

                                      BRENT CRUDE OIL x 100 15M CHART

December

I have recently been busy writing my thesis, and now that it has been graded and published I would like to do a short review about the subject. 

The quantitative research was carried out by first introducing concepts of technical analysis and by studying historical price data from a five-year time frame. The price data of the instruments was selected randomly from four different samples of asset classes. These segments included then 18 different derivative instruments. The price charts were then studied form a market technique- based strategy’s viewpoint: The strategy aims to find spots in the market, where movement will appear probably. The periods, through which the prices were studied, were also selected randomly from a 20-year timeframe. These fictitious order executions were obtained by entering the buying and selling signals into a table.  From these prices could then be the instruments behavior describing statistics derived.

 The results of the different instruments can be seen in the following pictures.

 In the first two columns we can see how many bullish, bearish and neutral periods each instrument had. Then we have columns with the signals given by the tested strategy,

Where the yellow highlighted cells represent numbers that are sums and the grey areas averages.

The quantitative results of the research showed that technical analysis can be used to some extent to gain continuously positive returns. As the research showed that instruments behave differently, the measure of profitability depends highly on the perspective from which the results are examined. Altogether, the scope of this study was to investigate, analyze and develop the field of technical analysis. As we can see in the tables, the commodities and index derivatives were clearly the most profitable instruments on average. The presented strategy represents a simple trend detection method that can easily be enhanced by adding terms and conditions.

Buy gold now?

EUROSTOXX and SMI open with a gap down

What happens next ?

According to a market technical strategy, we would have a bundle of sell orders just waiting to be filled below the recent low. But according to some other technical strategies, now would be a good time to buy. If the recent low will be broken, the DAX will most definitely be in a bear market at least the rest of the year.

Since we have a 96% correlation between the Dax and Eurostoxx, the same applies here. I am looking for a pullback and a movement trough 2972,7 that is where I place my order. I am also open for a major bullish correction.