GSK Glaxosmithkline Analysis April 2016 (D,M,Q)
Created on Monday, 25 April 2016 02:26
Written by Austin Galt
Glaxosmithkline Plc (GSK) is a healthcare company that researches and develops pharmaceuticals, vaccines and healthcare products. It is listed on the London Stock Exchange (LSE) with a market capitalisation of close to 72 billion GBP. Price last traded 1485 GBP.
Let’s take a bottom up approach beginning with the daily chart.
GSK DAILY CHART
The Fibonacci Fan shows the move up from the low starting to weaken as it trades through the angles. Once price breaks support from an angle it then becomes resistance and we can see price has recently found resistance from the 76.4% angle and turned back down. The 88.6% angle has provided support previously but I suspect price will bust below it on the next attempt.
The Bollinger Bands show price has left the upper band after a nice surge higher. Price is now back at the middle band. Does price continue on to the lower band or have one last lash at the upper band before heading back down? Time will tell.
The RSI recently made a new high which is generally bullish when taking a longer term view. For now it looks to be heading down.
The MACD indicator is bearish.
The moving averages with time periods of 100 (red) and 200 (black) are now in bullish formation however price moving down now may see these averages move closer together before price trades higher once again.
GSK MONTHLY CHART
The Bollinger Bands show price bouncing up off the lower band with price now just below the upper band. I favour one last move back down to the lower band before a new bull trend commences.
I have added Fibonacci retracement levels of the move up from April 2009 low to May 2013 high which was the first higher high. The first higher low often makes a deep correction and as such I am targeting price to get back down to at least the 76.4% level which stands at 1178 GBP.
I have drawn a Fibonacci Fan from the April 2009 low to May 2013 high which shows price currently at resistance from the 61.8% angle. I expect price to turn back down here and I am targeting the higher low to eventually be around support from the 88.6% angle.
The RSI looks likely to show a triple bullish divergence at a new price low now. That would look good to the bulls.
The MACD indicator is currently bullish.
GSK QUARTERLY CHART
The Bollinger Bands show price is back at the middle band but I would like to see another test of the lower band before becoming confident about a new bull trend being in play.
The bullish Fibonacci Fan shows the 2003 low at support from the 76.4% angle. This angle is currently providing resistance but price seems to be resisting the urge to head back down to the 88.6% angle. Perhaps the next low will be just above that support. Let’s see.
The bearish Fibonacci Fan shows price bullishly making its way through the angles. Price recently found resistance at the 88.6% angle. Once the next low is in place I favour a strong move up that breaks above this angle.
The RSI is looking a bit wishy washy at the moment and certainly nothing for the bulls to get excited about.
The MACD indicator looks to be threatening a bullish crossover but that is sometimes the exact moment the downtrend resumes.
Summing up, I favour one final move lower before a significant bull trend begins.
Disclosure – I have no financial interest in GSK.