CBA heading lower

IMO CBA has further to fall. Minimum target is $48. If that fails to hold, next target would be $46. Any rally should find resistance at around $51 - possibly $52.

Rally on life-support, barely breathing

The short term rally in the CBA share price is almost dead. A price fall below $51.46 will invalidate the Elliott Wave count for the move up which began in November 2010. It will not however invalidate the longer term picture - specifically the move up from the January 2009 low. That move has not even retraced 38% of that rally. So there is still lots of room for the price to retrace while maintaining the Elliott Wave count on a weekly chart.
Here's the daily chart.















Below is the weekly chart. One significant point about this chart is that from an Elliott Wave perspective the price is in a 4th wave correction. This is usually a difficult time for those trading the stock and can sometimes be quite demoralising. Sometimes, you can't be sure you have come out the 4th wave correction until the 5th wave is almost over. The other significant point is that while the chart holds this formation, the longer term target is around the $67 to $70. Keep that in mind as the price retraces. Keep in mind also that a retracement back to around $47 or even $42 is not out of the question.

CBA falls below trendline support but Elliott Wave count still pointing up

CBA's share price fell below trendline support on Wednesday but failed to close below it. In the meantime the Elliott Wave picture on the daily chart remains positive although it is now unlikely the price will exceed the mid-February high in the short term. The correction has been just a bit too deep to be considered normal profit taking even allowing for the ex-dividend factor. A fall below $51.90 at this stage would increase the odds that more than an ordinary correction is playing out.

Click chart to enlarge

Strong bounce off support

In my last post I mentioned that $52.40 was my guess for where the decline from the recent high would find support. Well the price duly found its way down to $52.38 this morning and then bounced off it strongly. A lower low next week would of course not be out of the question but it is looking increasingly unlikely. If the price rallies from here, the question is how far will it go in the short term. My guess is that $56 is the minimum target but it might struggle to go much further than that in the short term and it could take most of March to get there. Here's an updated chart.



Click chart to enlarge













This chart shows the CBA share price finding support at the trendline today. Click chart to enlarge

CBA in 'no man's land'

Right now CBA can't decide whether to resume its uptrend. The blue line study at the bottom of the chart is a 12-day RSI. It is just holding the upsloping trendline but it looks like someone crawling on plank that could slip and fall at any time. If it does fall, the most likely area of support continues to look to be the $51.90 to $52.60 zone with my guess being $52.40.

Click on chart to enlarge

CBA update

With CBA going ex-dividend, the question is where will the price fall of the last few days stabilise? The most likely target zone seems to be $51.60 (50% retracement of the move from the Nov 29 low) to $52.67 (50% retracement of the move from the Jan 6 low). This zone coincides with the wave 4 of the lesser degree which measures the move from the Jan low - a common support for the wave 4 of the next higher degree. Presently, there is really no reason to doubt that the price will not get back to at least the highs of around $55.80 in the short term, particularly given that the weekly chart is bullish and the general market is strong and rising as evidenced by the XAO Indicator http://asxindicator.blogspot.com/. A decline below $51.30 would change the shorter term picture, although the longer term targets would remain unchanged - for the time being.

Click on chart to enlarge

CBA has further to run

Elliott Wave enthusiasts will not be surprised to see CBA's share price finally moving upward. On the weekly chart CBA has been in a 4th wave correction since April 2010. It looks like the share price has now broken out. On an EW analysis, the minimum target on the weekly chart is the all-time high of $62-$63, but $67 to $72 is not an unreasonable target zone. Below are 2 charts, one shows the EW count and targets and the other shows my trading system which gave a buy signal on 19 January 2011. The vertical blue and red lines on the second chart show the days the XAO Indicator changes from red to blue and vice-versa. (Disclosure: I don't own shares in CBA but I do own call options).
Click on charts to expand