One of the stocks which Allan Gray is riding on in their Australian Equity Fund is WPL, if their fact sheet is checked. What do we see on the chart if we are to describe (not analysing it) the past price action behaviour ? A completed Accumulation Trading Range. Lets now put a little analysis to the chart.
I urge you to look at the UP TREND LINE drawn in dashed Red and 40 period weekly SMA. Almost hugging each other. Current value of the SMA is $29.28. Treat any encounter of the price action with this moving average as a potential support going forward. Observe it’s changing value as the price changes occur.
What is the PRIOR BREAKOUT ZONE ? $29.50 ZONE. Broken RESISTANCE now TURNS SUPPORT. What is the current value of the 40 period SMA ? $29.28 . Trendline is in that zone also. All three, re enforces this zone as a SIGNIFICANT SUPPORT on any re test. What usually happens after a breakout ? RETEST of the BREAKOUT ZONE. We, chart lovers know what a successful retest is. A PIVOT or equivalent for me, specially on a good volume.
The completed trading range has had enough cause built ( cause of almost a year) which may potentially result in nice effect going forward.
OBV at the bottom window is also strong and supportive of the young and vibrant bull run with WPL.
As I get older, I may get forgetful at times, mixing up my daily and weekly charts (never, just a kidding) . I therefore remind myself that each bar represents a WEEK not a DAY. Therefore my analysis time horizon is weeks not days.
Although it is not a high momentum stock, so far anyway, which may be boring, I am putting it to my everyday watchlist now.
Weekly WPL chart below.
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