The FED lowered rates but warned that they may remain on hold for the foreseeable future. There is a belief that economic recovery will start in the second half of the year. As a result equity markets are rallying. Opinions are divided, but the mood is positive. Economic news is coming more or less in line with forecast. Non-farm payrolls were less bad than predicted boosting stock markets around the world and the dollar is bouncing nicely which is good news for UK exporters like GlaxoSmithKline.
GlaxoSmithKline has underperformed for too long but the trend is turning up. At the end of a downtrend, stocks tend to show better relative strength. This has been a feature recently with this particular stock. Then I look at potential levels which have been tested a few times. Here we can see that the red trendline has been tested four times in the last few months and today prices are breaking through. The odds are that the stock will rally in the next few weeks. A reversal pattern, namely an inverse head and shoulders, is complete. A potential target is 1245p.
The unique timing analysis at e-yield has been developed by Thierry Laduguie, who has been working for investors since 2000. For more information, visit E-yield.co.uk
