Investment Assignment - Technical Analysis on Esso and Shell

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Figure 1.4

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Technical Analysis for Esso

Figure 1.1 shows the bar chart for Esso while figure 1.2 shows the line chart for Esso for the period 3^rd January 2011 until 1^st April 2011. For the period, the highest price of Esso is RM4.40 at 25^th March 2011. On the other hand, the lowest price of Esso is RM2.73 at 3^rd January 2011.

Figure 1.3 shows the moving average line (MA) use for Esso which includes the 20 days moving average line (blue colour line) and 50 days moving average line (red colour line). The 20 days MA line is cut through the 50 days MA line from below on 14^th January 2011. After 14^th January 2011, the 20 days MA continues to maintain above the 50 days MA.  This indicates that Esso is change from a negative trend to a positive trend. Therefore on 1^st April 2011, the share traders should make the decision to buy Esso in a positive trend.

Figure 1.4 shows the support and resistance lines for Esso. On 1^st April 2011, the share price of Esso is rise above the resist line. Therefore, there is a bullish signal for Esso. Share traders should make the decision to buy Esso because it is up trending.

Technical Analysis for Shell

Figure 2.1 shows the bar chart for Shell while figure 2.2 shows the line chart for Shell for the period 3^rd January 2011 until 1^st April 2011. For the period, the highest price of Shell is RM11.20 at 25^th March 2011. On the other hand, the lowest price of Shell is RM10.20 at 23^rd February 2011.

Figure 2.3 shows the moving average line (MA) use for Shell which includes the 20 days moving average line (blue colour line) and 50 days moving average line (red colour line). The 20 days MA line is cut through the 50 days MA line from below on 21^st March 2011. After 21^st March 2011, the 20 days MA continues to maintain above the 50 days MA.  This indicates that Shell is change from a negative trend to a positive trend. Therefore on 1^st April 2011, the share traders should make the decision to buy Shell in a positive trend.

Figure 2.4 shows the support and resistance lines for Shell. On 1 April 2011, the share price of Shell is fall below the support line. Therefore, there is a bearish signal for Shell. Share traders should make the decision to sell Shell because it is down trending.

Conclusion for technical analysis

For both moving average line and support and resistance line giving the signal that Esso is current on positive and up trend. However, even Shell moving average line gives the positive signal, the share price of Shell fall below the support line which indicates that Shell’s share price currently unable to support and is on the down trend.

In conclusion, the share traders should buy the Esso’s share and sell Shell’s share from technical analysis perspective.