BNS Bank Of Nova Scotia Analysis May 2016 (W,M,Q)
Created on Sunday, 22 May 2016 00:16
Written by Austin Galt
Bank Of Nova Scotia (BNS) is a diversified financial institution listed on the Toronto Stock Exchange (TSX) with a market capitalisation of around $75billion. Price last traded at $63.10.
Let’s analyse the quarterly, monthly and weekly charts.
BNS QUARTERLY CHART
There is clearly a solid bull trend in play and the recent move down looks like a typical correction which now looks complete.
The Bollinger Bands show the recent low at support from the lower band and price bounced immediately off this band which is generally a bullish sign. Price is now back at the middle band although I suspect some consolidation is in order before price decides to head on up to challenge the upper band.
I have drawn a Fibonacci Fan from the 1998 low to 2007 high. This shows the 2009 low at support from the 76.4% angle while the all time high set in 2014 was around resistance from the 23.6% angle. The recent correction bottomed out around support from the 50% angle and I now believe the bull market has resumed.
I have added Fibonacci retracement levels of the move up from 1998 low to 2014 high. The recent low was right around support from the 38.2% level which keeps the overall bull trend in a strong position.
The horizontal line denotes the 2007 high. Old tops often provide support in the future and the recent low has given this test a solid test.
The RSI and MACD indicator both appear to be turning back up but nothing to get too excited about just yet.
BNS MONTHLY CHART
The Bollinger Bands show price is back above the middle band and while it is certainly possible for price to continue on up to the upper band I personally favour a move back down to around the lower band to set up a higher low.
I have drawn a Fibonacci Fan from the 2009 low to 2011 high. This shows the 2014 high at resistance from the 50% angle while te recent low was around support from the 76.4% angle. I suspect another test of this 76.4% angle is in store before price heads back up to challenge the 61.8% angle.
The RSI and MACD indicator have turned back up nicely. A move back down in the short term can’t be ruled out, in fact I favour it, however this looks like the start of a solid bullish move.
BNS WEEKLY CHART
The horizontal line denotes the previous swing high which price has recently surpassed. So, we have a higher high and now just need a higher low to confirm the bull trend.
The Bollinger Bands show price is back down around the middle band and I favour price to put in a higher low down at the lower band.
I have added Fibonacci retracement levels of the recent move up and being the first correction in a new bull trend I favour a deep correction. The 76.4% level at $54.76 or therebouts is my target for higher low.
The moving averages with time periods of 100 (red) and 200 (black) are in bullish formation with the red line above the black line.
The RSI made a new high which is often the case at the first new higher high made by price.
The MACD indicator is bearish although it just looks like a short break to my eye.
Summing up, I expect price to move back down to set up a higher low. After that, the bull trend should resume with full effect.
Disclosure – I have no financial interest in BNS.