asia stock chart of the week 24 oct 28 oct national australia bank 1835042016

National Australia Bank (ASX: NAB) – Limited potential upside below 29.32/63 range top

(Click to enlarge charts)

Key elements

• As seen from the relative strength chart, NAB has underperformed the benchmark ASX 200 index since November 2015 and elements are still advocating for further potential underperformance ahead (refer to the 1^st chart).
• Since the its major swing low of 23.82 printed on early February 2016, NAB has been evolving in a multi-month sideways range configuration with resistance at 29.32/63 (see weekly chart).
• The multi-month sideways range top/resistance at 29.32/63 also confluences with a Fibonacci cluster (see daily chart).
• The recent medium-term term up move of 15% from the 27 June 2016 post Brexit low of 23.90 is now showing signs of exhaustion. The longer-term RSI weekly is now coming close to its significant descending trendline resistance coupled with a bearish divergence signal that is being flashed out in the daily RSI oscillator.
• Intermediate support now rests at 27.20 (see daily chart)

Key levels (1 to 3 weeks)

Pivot (key resistance): 29.32/63

Supports: 27.20 (downside trigger) & 24.10/23.82

Next resistance: 33.50

Conclusion

Technical elements are suggesting limited upside potential for National Australia Bank.  As long as the 29.32/63 significant range top/resistance is not surpassed and a break below 27.20, NAB is likely to see a potential medium-term down move back towards its range bottom/support at 24.10/23.82.

However, a break above 29.63 may invalidate the bearish view to see a continuation of the up move in place since 27 June 2016 to target the next resistance at 33.50.

Charts are from eSignal as at Thurs, 20 Oct 2016

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.