HSBC Holdings (LON :), the largest bank in Europe, reported an annual gain of $ 12.6 billion for the full year 2018, under the estimate of $ 13.7 billion with 8%. Shares today dipped almost 4% in London, because traders respond to the results.
The bank giant attributed the disappointing profit to a reduction in the number of transactions across the board: for trading, asset management and retail banking since the peak in market volatility last year. It also called the American-Chinese trade war as a factor in the profit, with three-quarters of its activities in Asia, and said it considered the Brexit an imminent risk for future profits.
CEO John Flint described the fourth quarter of last year as "challenging", while the bank warned in its statement that "there are more risks to global economic growth than this time last year."
Looking at the graph, it is clear that the prospects of the mega bank are bleak, both from a fundamental as well as from a technical perspective.
The stock closed a massive Head & Shoulders summit, going from February 2017 – October 2018, the negative break-out at the end of October reaching a substantial penetration of 10%
While completing the H & S Summit, the 50-week MA dropped below the 100-week MA, showing that prices across different ranges fall into a downward trend. Also, the mentioned MA & # 39; s now offer resistance above the neckline of the pattern.
The outbreak was followed by a return movement that successfully tested the resistance of the pattern. Since then the price has been folded between the neckline and the 50-week and 100-week MA & # 39; s top and the MA drop of 200 weeks. The range formed a symmetrical triangle, bearish in a downward trend, which is this after it has dropped from the 800p levels of January 2018.
The symmetrical triangle, which forms between the mentioned resistance and support, verifies them and bears witness to its own dynamics, in which the market is still unclear about the outlook. However, as a continuation pattern, it is biased to the detriment, confirmed by the multiple resistance degradation of the 50-week and 100-week MA & # 39; s and the neckline of the massive H & S top.
Note the symmetry of a threatening downward breakthrough of the symmetrical triangle, which coincides with the 200-week MA, the last support to the 2015 highs at the mid-500p levels.
Trading Strategies – Short position setting
Conservative traders must wait for a decisive breakthrough in the symmetrical triangle, with a penetration of at least 3% being used to reduce the risk of a bear trap before they move into a short position. Then they would wait for a probable return movement to test the integrity of the pattern again, with at least one long red candle that floods a red or small candle of both colors.
Moderate traders risk a short position with a breakdown of 2% at the bottom, and then wait for a return move for better participation, if not as proof of trend.
Aggressive traders may be satisfied with a lock below the 628p level and fall to the lowest level since November 5 (dotted line).
Trade sample
Item: 628p
Stop-Loss: 643p
Risk: 15p
Aim: 550p, around psychological number above 2015 highlights
Reward: 78p
Risk-return ratio: 1: 5
