I have been expecting CSL's price to follow the weekly trendline higher but it has now closed below that trendline for 3 consecutive weeks. This weeks candle is particularly bearish whereas the prior week had some positive aspects to it. Cartainly a stock to buy back into when it recovers.

CSL 15Jan2021

13 November 2020

CSL has recently moved up to make new highs and present an interim target of $253.48 although this stock represents potential for a good long term trendline trade. 

26 September 2020

A look at a chart of CSL over the past 30 years will show it has been a consistent and stable performer making it one of the best investments on the ASX. The largest retracement in CSL’s history started February 2020 but may have bottomed in July.

Elliott Wave Count: Unclear given lack of identifiable wave pattern. The February 2020 peak could be the top of W3 with the recent retracement W4.

Trend: Price is in a long-term uptrend and a short-term downtrend. Price has been moving up for 8 weeks and a continuation of this higher prices for the next 4 weeks would see a new uptrend commenced.

Charting signals: Price closed for two consecutive weeks above a downtrend line on the weekly chart (a potential buy signal). Price has made a higher trough on the weekly chart and if price goes above $317.99 it will make a higher peak (another buy signal). Should the aforementioned uptrend form that would be another buy signal.

Backtest: A backtest of the chart since 2011 suggests a buy on two consecutive weekly closes over a valid downtrend line and a sell when prices fall 6% below a higher trough (see educational material for explanation) produced a profit of 220%, 75% and 34% from only 3 trades over the test period where the last trade was constrained by prices falling 50% from their peak in the Covid price collapse before the stop loss was triggered.

CSL 26Sept2020


Robert Norman

Phone: 0428 346 951
Email: robert@sharecharting.com.au

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