Whitehaven Coal Ltd (ASX:WHC) Trading Outlook

Whitehaven Coal Ltd (ASX:WHC) Trading Outlook

Whitehaven Coal Ltd (ASX:WHC) Trading Outlook

HEFFX Notes

Overall, the bias in prices is: Upwards.

Short term: Prices are moving.

Intermediate term: Prices are trending.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 1.32.

The projected upper bound is: 2.00.

The projected lower bound is: 1.70.

The projected closing price is: 1.85.

Whitehaven Coal Ltd (ASX:WHC) closed up 0.140 at 1.825. Volume was 28% above average (neutral) and Bollinger Bands were 115% wider than normal.

Open High Low Close Volume___
1.670 1.840 1.630 1.825 5,419,423

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1.72 1.21 0.84
Volatility: 62 74 87
Volume: 4,541,596 5,214,090 4,235,376

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

WHITEHAVEN FPO is currently 116.8% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into WHC.AX (mildly bullish). Our trend forecasting oscillators are currently bullish on WHC.AX and have had this outlook for the last 69 periods. Our momentum oscillator is currently indicating that WHC.AX is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

Momentum

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 45.9459. This is not an overbought or oversold reading. The last signal was a sell 12 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 76.41. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 18 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 94. This is not a topping or bottoming area. The last signal was a sell 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 21 black candles for a net of 7 white candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with WHITEHAVEN FPO), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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