Daily Market Updates & Trading Signals By Option Banque

[Option_Banque]

FTSE100 Surges More Than 200 Points Amid Rally In Chinese Stocks

The London benchmark, the FTSE 100, gained 2.56% or 220 points, closing the day at 6,192.03, with the advanced led by mining-related shares amid surging Chinese stocks.
Anglo American added 9.5%, Antofagasta jumped 9.5% and Rio Tinto closed up 7%. The index has extended is recovery above Friday’s close, up on the week by 60 points.
Technically, the daily chart shows that the technical indicators maintain their upward strength, but remain still below their mid-lines, whilst the 20 SMA heads strongly lower around 6,470.
In the 4 hours chart, the upside is also favored as the index is now above its 20 SMA, whilst the Momentum indicator heads sharply higher above its 100 level and the RSI is slowly resuming its advance around 52.

The daily high stands at 6,231, with an upward acceleration above it supporting a continued advance for this Friday.
Meanwhile US indexes closed sharply higher on Thursday, with the Dow Jones Industrial Average closing the day at 16,654.90 up 370 points or 2.27%, the best two-day point gain ever, following Wednesday advance of 619 points.
The S&P and the Nasdaq rose around 2.45% each, supported by easing concerns over China and a strong US GDP advanced reading for the second quarter of this 2015. The Dow is now above its Friday’s close, finally positive in the week.

Technically, the daily chart shows that the technical indicators have continued recovering ground from extreme oversold readings, but are still in negative territory, whilst the moving averages are far above the current level.
In the shorter term, the index is biased higher, as the 4 hours chart shows that the 20 SMA is turning higher well below the current level, whilst the technical indicators maintain strong bullish slopes above their mid-lines.

 

[FxBinaryPoint]

nice analysis

 

[Option_Banque]

Gold – XAU

Gold closed down on Wednesday and made its intraday high of US$1142.35/ounce after setting intraday low of US$1132.03/ounce. Gold went down by 0.489% at US$1133.76/ounce.

Technicals in Focus:

In daily charts, prices are above 50DMA (1130) and breakage below will call for 1124-1116. MACD is above zero line but histograms are decreasing trend and it will bring pessimistic stance in the upcoming sessions. RSI is in overbought region and more upside is expected. Stochastic Oscillator is in neutral territory and giving Positive crossover to confirm bullish stance for intraday trade.

Spot gold is expected to rise towards a range of $1,137-$1,143 per ounce, as indicated by a double-bottom and a Fibonacci retracement analysis. However, this pattern could only be confirmed when gold climbs above $1,131. Support will be at $1,125, the 14.6 percent level, a break below which could signal a continuation of the downtrend towards $1,117.35.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1142-1162 keeping stop loss above 1162 and targeting 11137-1124 and 1116-1109; breakage above 1169 will be buy call keeping target of 1174-1179. Buy above 1124-1109 with risk below 1101, targeting 1136-1145 and 1154-116.

 

[Option_Banque]

FTSE Poised For Major Move Amid NFP Release

The FTSE 100 followed European equities higher, with the London benchmark advancing 1.82% and closing the day at 6,194.10, after the ECB suggested it could extend its bond buying program, if required.

Airlines were among the biggest winners, after Easyjet forecast profits of between £675m and £700m thanks to record traffic figures, ending up 5.4%, whilst IAG surged also with the news, up 4.6%. For more forex technical analysis articles you may visit fxbinarypoint forum.

The index has now more technical chances of extend its advance, as the technical indicators surged above previous weekly highs and maintain their bullish strength, although still below their mid-lines.

The 20 SMA in the same chart heads sharply lower well above the current level, which means the downward risk is not over yet. In the 4 hours chart, the outlook is less clear, as despite the index holds above a mild bullish 20 SMA, the technical indicators turned lower around their mid-lines, limiting chances of a stronger advance, unless the index managed to extend beyond 6,259, last Friday’s high​

 

[Option_Banque]

EUR/USD May Test 1.1080 Support Amid NFP Release

The EUR/USD pair closed at 1.1145 on Friday, down for a second week in-a-row as the ECB dovish tone weighed.
Technically, the daily chart shows that the price managed to close the day slightly above the 100 and 200 SMAs, but below the 20 SMA, whilst the Momentum indicator heads lower around the 100 level and the RSI hovers around 47, maintaining the risk towards the downside.
The daily 200 SMA stands around 1.1090, from where the pair bounced several times over the last few trading days. In the 4 hours chart, the price is below a bearish 20 SMA, whilst the technical indicators lack directional strength, but remain below their mid-lines, supporting a downward continuation on a break below the 1.1080 support.
Meanwhile US Nonfarm Payrolls mixed expectations as the economy created 173K new jobs in August, against 220K expected. Unemployment rate however, fell down to 5.1%, whilst wages ticked higher, up to 0.3%. July figures were revised higher, as the economy added 245K back then. The mixed result was not enough to confirm a FED’s September rate hike, neither to deny it.
Stocks closed in the red, and the major indexes seem poised to retest the lows reached during the Black Monday, with Chinese economic slowdown still as the main markets’ theme for the upcoming days probably favoring more risk aversion trading.

 

[Option_Banque]

Oil Looks Vulnerable Ahead of Major Economic Releases

Oil prices were down slightly on Monday as traders start to position ahead of economic growth data from the eurozone due out this week.

On London’s ICE Futures, trading in the global crude benchmark Brent was down 0.55% at $49.06 a barrel for cargoes loading in October. Trade in WTI was also extremely slow, with prices down 0.5% at $45.56 a barrel on the New York Mercantile Exchange.

Traders said volumes were subdued, with the U.S. market closed for the Labor Day holiday.

European nations are expected to report their second-quarter growth numbers later this week, and disappointing data could depress the oil market, traders said. Singapore-based Phillip Futures believes the Brent and WTI prices to $46.81 and $43.53 respectively by Friday.

Increasing supply from members of the Organization of the Petroleum Exporting Countries, especially from Iran, further dampens any bullish sentiment.

 

[Option_Banque]

Buying Gold Call Options at $1100 May Be A Good Strategy

Gold prices posted quite limited intraday gains yesterday, with spot hovering around $ 1,122.70 a troy ounce by US close, as surging risk appetite sent investors away from the safe-haven asset.

The downside, however, was limited as commodities traded generally higher, following mining-related shares.

Additionally, investors prefer to remain away from the metal, as the US FED meeting looms, with the Central Bank suspected to make its first rate hike which will be the first since 2006.

On daily basis, the downward potential remains strong, as the price is back below its moving averages, whilst the technical indicators remain well below their mid-lines, with limited downward momentum.

In shorter term, the 4 hours chart presents a neutral stance, as the price hovers around its 20 SMA whilst the technical indicators lack directional strength around their mid-lines.

The main support continues to be the 1,109.20 region, and it will take a break below it to confirm additional declines, back towards the July low at 1,071.00. So based on overall analysis, buying gold call options at $1100 may be a good strategy.

 

[Option_Banque]

J&J – A Hot Stock For Call Options

Johnson & Johnson (NYSE:JNJ) now trades at its own ten-year valuation. Shares are down significantly since broader market corrections. Big capital gains are not likely here, but investors will get a 3.3% dividend yield with high-single digit dividend growth and a long runway of growth ahead.

Since 2009, J&J has raised its dividend by 7.7% each year. Since 2000, J&J has raised dividends by around 11% per year on average. J&J is a high-quality company that should fit in many dividend portfolios. Unfortunately for perspective buyers, over the last four years, J&J has been overvalued to its historical valuation. The recent pullback has changed that, and so dividend investors once again have the opportunity to get a stake in J&J for a reasonable price.

So, is J&J a screaming buy call options right here? Probably yes as per overall fundamental outlook.

 

[Option_Banque]

EUR/USD Bulls Gain Momentum After Poor US Data

The EUR/USD pair yesterday ended the day near its high, around the 61.8% retracement of the latest bullish run up to 1.1713, and the 1 hour chart shows that the technical indicators are giving signs of exhaustion in overbought territory, whilst the price has managed to advance well above its moving averages.

In the 4 hours chart, the technical indicators have bounced from their mid-lines and maintain their bullish slopes, whilst the 20 SMA heads slightly higher around the 1.1190 level. September high at 1.1331 is now the immediate resistance, followed by the 50% retracement of the same rally at 1.1365.

Poor US data triggered a dollar sell-off during the American afternoon, with the EUR/USD pair reaching 1.1294 a fresh weekly high.

US wholesale inventories decreased by 0.1%, while wholesale sales dropped 0.3% in July. Also, import prices declined 1.8% in August following a 0.9% drop the previous month, mostly due to lower fuel prices.

Prices exports also fell in by 1.4% a 0.4% decline in the previous month. Weekly unemployment claims edged at 275K as expected. This data is hardly able to trigger a 100 pips movement as it did this Thursday, but as FED’s meeting looms, uncertainty weighs, resulting in crazy spikes either side of the board.

 

[Option_Banque]

EUR/USD Eyes 1.1445 Ahead Of Key Releases

The EUR/USD managed to close the week at its highest since August 27th, reaching 1.1348 before settling at 1.1335.Technically, bulls continue dominating the pair, as the daily chart shows that the rally extended well above its 100 DMA in the 1.1100 region, whilst the 20 SMA heads higher around 1.1275, reinforcing the static support placed at 1.1282, the 61.8% retracement of its latest bullish run.

In the same chart, the Momentum indicator is around its 100 level with a sharp upward slope, whilst the RSI indicator heads higher around 59. In the 4 hours chart the price is also above a bullish 20 SMA, although the technical indicators have lost upward strength and turned flat, with the RSI at 70.

The immediate resistance comes at 1.1365, the 50% retracement of the same rally, with a break above it favoring a steady continuation towards the 1.1440/50 price zone.

Meanwhile the upcoming FED meeting this Wednesday, is probably the most awaited event of the year, as the Central Bank will unveil whether or not is ready to raise rates. Majors are expected to react to Chinese weekend data at this week opening, but will hardly rally ahead of the US Central Bank meeting.

China’s industrial production growth remained weak in August, reaching 6.1% compared to a year before, but marginally higher from the 6.0% printed last month. Also, growth in fixed asset investment slowed to its lowest rate growth in over three years in August, down to 9.2% from 10.3% previous.

 

[Option_Banque]

Buy The GAP Call Options Now Before It’s Too Late

The Gap Inc. (NYSE: GPS) is a big and well-known apparel company with a market capitalization of about $13B. Its main business is designing, manufacturing, and selling apparel for men, women, and children.

Despite of the slowing revenue growth, Old Navy’s sales continue to grow fast, and in the near future, they will offset the negative growth of other brands.

During the last 52 weeks, GPS has been showing terrible results. Its stock price has decreased by circa 27%, while the Nasdaq Composite has increased by 5% (see Diagrams 2 and 3). The main causes for such results are lowering revenue growth on the one hand and the fact that company uses cash only for buybacks.

However, it looks like that the stock is worth buying, as it is a strong brand with a successful history to back it up. In fiscal 2006, the company hit a revenue ceiling of $16B and stopped growing. However, since the revenue bottom of $14.5B in fiscal 2010, Gap Inc. has shown nearly 16% growth, which can be a sign for future development.

Gap looks significantly undervalued, according to overall fundamental outlook, which is why we recommend buying the call options in the stock now.

 

[Option_Banque]

Pound May Be A Good Choice For Call Trades

The British Pound was the first to capitulate against dollar strength, as an early advance stalled short from the weekly high, with the pair in a steady slide ever since reaching 1.5460.

Britain’s inflation was as expected unchanged in August, down from the 0.1% printed in July, whilst the core reading decreased to 1.0% from the previous 1.2%, also in line with market´s expectations. An upside surprise in the Retail Price index, up y 0.5% in the same month, partially limited the negative effects of the main headline.

Nevertheless, the pair fell down to the 1.5330 where it stands by the end of the day. The 1 hour chart shows that the price fell well below a now bearish 20 SMA, whilst the technical indicators are losing their bearish strength in oversold levels, rather signaling some short term consolidation ahead than a sign of downward exhaustion.

In the 4 hours chart, the 20 SMA is turning lower in the 1.5420 region, whilst the Momentum indicator stands flat below the 100 level, and the RSI heads lower around 39, anticipating additional declines.

The pair has an immediate support around 1.5320, the 23.6% retracement of the latest decline, with a break below it exposing the pair to a steady decline towards the 1.5250 price zone.

 

[Option_Banque]

Buying Long Term Call Options In V Stock Appears To Be A Wise Decision

Visa (NYSE:V) has been a stable stock during 2015, although it had to bear the brunt of a global equity sell-off over the last couple of months. During this time, the stock declined by around 9% from its peak near July end.

Despite that, V along with MasterCard (NYSE:MA), its major global competitor, has been able to garner a relatively higher valuation compared to smaller players such as American Express (NYSE:AXP).

Looking at the future earning potential, it seems that V would lag behind MA and AXP. As of now, estimates for 2016 EPS for V, MA and AXP stand at $2.78, $3.83, and $5.76, respectively.

However, in terms of P/BV, V remains undervalued compared to MA. V’s P/BV of 6.4 is less than half of MA’s P/BV of 16.71. Another point to note here is that given the size and profile of V, only an evaluation against MA would constitute an apples-to-apples comparison.

Over the last five quarters, V has ensured a healthy quarter-end cash position of around $2 billion and ploughed back profits to the extent that on average retained earnings comprised 35% of the overall owner’s capital.

It makes sense for V to capture more customers owing to its dominating position, particularly in the credit card market. V has the unique advantage of having the best of both worlds. It has not only the highest number of acceptance points with around 36 million registered merchants but also the largest number of issued cards at around 2.9 billion. MA is the only other provider to come anywhere close to V with 36 million merchants and around 2.1 billion cards.

So considering the overall outlook, buying the long term options in Visa stock could be a good strategy.

 

[Option_Banque]

Euro To Face Major Hurdle At 1.1500

The dollar sold-off with the news, with European currencies advancing the most against the greenback. The EUR/USD pair broke above 1.1400 before the Wall Street’s closing bell and maintains a strong upward tone as the hourly chart shows that the technical indicators are heading sharply higher, despite being in overbought territory, while the price has accelerated far above its moving averages.

In the 4 hours chart, the price has found intraday support in a mild bullish 20 SMA, whilst the technical indicators have finally left neutral territory, with the Momentum indicator heading higher above 100 and the RSI consolidating around 65, pointing for additional gains on a break above the mentioned high, towards the 1.1460/70 region, a major static resistance area.

The US Federal Reserve maintain its rates on hold in between 0.00and 0.25% in their September meeting, with only 1 voter dissenting with such decision.

The accompanying statement was quite dovish, with officers concerned over dollar’s strength, energy prices and the global economic slowdown, as they could put further put further downward pressure on inflation in the near term, and therefore “these developments may also restrain U.S. activities somewhat.”

 

[Option_Banque]

EUR/Dollar To Find Major Support At 1.1258

The EUR/USD traded as high as 1.1459 on Friday, before turning sharply south during the American afternoon, to close the day around the 1.1300 figure.

At this point, the technical picture continues lacking clear directional strength, as daily basis, the price has retreated back towards its 20 SMA that heads slightly lower around 1.1240, whilst the Momentum indicator has turned flat above the 100 level and the RSI indicator turned south, now around 53.

Nevertheless, the pair holds above its 100 and 200 SMAs, both pretty much flat and well below the current level, limiting the downside around 1.1080/1.1130. In the 4 hours chart, the price has broken below its 20 SMA, whilst the technical indicators indicate an increasing bearish potential, crossing their mid-lines towards the downside.

Dollar’s sell off posted a U-turn on Friday, with the America currency recovering a good part of its losses, particularly against its European rivals.

During the weekend, Greece went to the polls, with the first results expected around Tokyo’s opening. There are few chances of the news affecting the common currency beyond some spikes at the opening, given that no matter who wins, the economic scenario will hardly change. China will release a sentiment indicator later on in the day, with more chances of reaching a market that has been trading mostly on sentiment for already several weeks.

Also, and during the weekend, FED’s Bullard stated that he pushed against the decision to delay an interest rate increase, because the economy has more or less fulfilled policy makers’ goals, which may lead to some dollar gains at the opening, outside the EUR/USD pair.

 

[Option_Banque]

Could GBP/CAD Break The Current Range?

The GBP/CAD remained confined to a tight range near its recent highs, as both currencies traded generally lower against its American rival.

The Canadian dollar was unable to find support on rising oil prices, but came under pressure under the end of the day, as BOC’s Governor Poloz said that a lower CAD is cushioning the damage from oil’s decline.

Despite not completely comfortable with the ongoing economic situation, Poloz made no references to interest rates direction.

The 1 hour chart for the cross shows that trading has been quite choppy intraday, with the price moving back and forth around its 20 SMA, whilst the technical indicators remain stuck around their mid-lines. In the 4 hours chart, a mild positive tone prevails given that the technical indicators head higher for their mid-lines, and that the price develops above a bullish 20 SMA.

Nevertheless, intraday selling interest continues surging on approaches to the 2.0550/60 region, which means it will take a clear break above it to confirm a steadier advance.

 

[Option_Banque]

USD/JPY Faces Tough Resistance At 120.30

The US Dollar recently traded higher against the Japanese Yen, but failed near an important confluence resistance area. There is a confluence area formed near a major bearish trend line on the hourly chart of the USDJPY pair, as the 100 and 200 simple moving averages are also positioned around it. Moreover, the 120.30 level is a pivot area acting as a hurdle for buyers. In short, it won’t be easy for buyers to take the pair higher and clear the trend line and resistance area.

On the downside, there is a double bottom pattern noted around the 119.65 level. So, there are mixed signals on the hourly chart, suggesting that the pair might trade anyway moving ahead and one should trade with caution.

Earlier during the Asian session, the Chinese Caixin China Services PMI™, which is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private service sector companies was released by Markit Economics. The market was expecting an increase from the last reading of 47.3 to 47.5 in September 2015. The outcome was a negative one, as there was a decline noted to 47.0.

 

[Option_Banque]

1.1335 Remains Key Hurdle For EUR/USD

The EUR/USD has shown little progress these last few days, once again, stuck around the 1.1200 level. The daily chart shows that the price has been hovering around horizontal moving averages, with the 20 SMA now around 1.1245.

In the same chart, the Momentum indicator is flat around 100 whilst the RSI is also flat right below its 50 level, in line with a neutral stance.

In short term, the 4 hours chart shows that the price has managed to advance a few pips above its 20 SMA, whilst the technical indicators are bouncing from their mid-lines, with no actual momentum. The base of the range has been set at 1.1080, which means additional declines below it, are required to confirm a bearish continuation, while bulls may get encouraged only with an upward acceleration beyond 1.1335.

Choppy trading and no clear trend has been the theme surrounding the EUR/USD pair for one more week, as risk sentiment and increasing uncertainty over what’s next for both Central Banks, have kept investors beyond cautious. Nevertheless, US FED’s head, Janet Yellen, shed some light on Thursday, saying that the US is still in the way of a rate hike sometime this year. The common currency fell down to 1.1104 intra-week, but managed to close it around the 1.1200 level, which seems to have a comfort level for scared investors.

During this week, market’s attention will focus in the EU inflation and the US employment report, both expected to offer some clues on the health of these economies. However, risk-related sentiment will also have its saying on the forex board.

 

[Option_Banque]

20 SMA Remains A Key Hurdle For GBP/CAD

The GBP/CAD posted a tepid advance yesterday, extending up to 2.0323 intraday, but ending the day below the 2.0300 level.

A strong decline in oil prices, as WTI fell down to end the day around $ 44.50 a barrel, kept the Canadian dollar under pressure, whilst the Pound consolidated its latest losses, helping the cross advancing.

Technically, the 1 hour chart presents a limited upward potential as the price is few pips above a mild bullish 20 SMA, whilst the technical indicators aim slightly higher in positive territory.

In the 4 hours chart, however, the price remains unable to advance beyond its 20 SMA, whilst the technical indicators remain flat below their mid-lines, limiting chances of a stronger recovery.

At this point, the pair needs to advance above the 2.0345 level, the 200 EMA in this last time frame, to be able to extend its advance up to the 2.0420/40 price zone should the Pound recover its strength.

 

[Option_Banque]

US Stocks End Worst Quarter Since 2011

Wall Street closed in the green with the Dow Jones Industrial Average advancing 1.47% and ending the day at 16,284.70. The Nasdaq and the S&P also closed with solid intraday gains, the first helped by a bounce in the biotech sector. Nevertheless it was the worst quarter for US indexes since 2011, on fear that China’s economic slowdown would spread globally.

Technically, the daily chart shows that the technical indicators have extended their recoveries, but are still below their mid-lines, whilst the index remains below a flat 20 SMA, situation that replicates in other major indexes.

The intraday recovery stalled well below Monday’s high of 16,373, the level to break to see a more sustainable recovery.

In the 4 hours chart, the index has advanced some above a still bearish 20 SMA, whilst the technical indicators lack directional strength right above their mid-lines, and the 100 and 200 SMAs stand above the current level, all of which limits chances of a stronger advance.