Tuesday, January 5, 2010

VISA: Harmonic Balance

On Dec 08 I presented a chart of Visa (V: NYSE) arguing that Visa could be viewed as a proxy for direct consumer participation in the economy. Since that point Visa has continued its rally and has reached its all-time high which is approximately near the high (May 2008) attained just after it was listed.

Visa has encountered resistance at this level and has formed a harmonic balance:

  • Time-Price Harmonic: Triangle B (rally from the Jan 09 low to recent high = 1.272 Triangle A (decline from May 08 high)
  • Cycle Harmonic: Vector XY (rally of lows to June 09 high) = Vector YZ (June 09 high-Recent high--double top?). This cycle harmonic is depicted by the light blue circle.
  • Price Harmonic: The rally XZ is 1.618 the initial rally XY.

Since reaching the recent high, Visa has broken out of the sphere of influence and has moved sideways.

Visa is slightly overbougth and momentum indicators are showing 'non-confirmations' of the recent high. A short position in Visa should be accompanied with a stop just above the recent high.

*click image for a larger view*

1 comment:

Jim said...

Nice chart,...thanks for sharing your work.
Regards, Jim P.