Technical Analysis &Non-cyclical_Stocks : 2019-08-07

The cyclical nature of the American labor market may affect the dynamics of PCI.

In this review, we suggest to consider a personal composite instrument (PCI) Non-cyclical_Stocks - Stock Index Non-cyclic stocks. It reflects the price dynamics of a portfolio of 6 shares of the world's largest companies that produce consumer goods and services. Will the Non-cyclical_Stocks quotations fall?

After the announcement of new duties on Chinese goods, a correction began on the US stock market. Investors fear China’s retaliation and sanctions on US goods. Regarding American companies in the consumer sector, it can be noted that the unemployment rate in the US is now 3.7%. This is a minimum since 1969. The American labor market, as a rule, shows a cyclicality around an average level of 6%. In case of an increase in unemployment to the average historical level, the income of consumer companies may decrease.


On the daily timeframe Non-cyclical_Stocks: D1 has broken down the uptrend support line. Technical analysis indicators formed a downtrend signal. Further downward correction is possible in case of publication of negative macroeconomic and corporate data.

  • The Parabolic indicator demonstrates a downtrend signal.
  • The Bolinger bands widened, indicating a volatility increase. Both Bollinger Lines Slope Down.
  • The RSI indicator is below the 50 mark . It has formed a divergence to decrease.
  • The MACD indicator gives a bearish signal.

The bearish momentum may develop if Non-cyclical_Stocks drops below its last low: 127.5. This level can be used as an entry point. The initial stop lose may be placed higher than the last upper fractal, historical high, Bollinger upper line and Parabolic signal: 135.5. After opening the pending order, the stop shall be moved following the signals of Bollinger and Parabolic to the next fractal minimum. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place a stop loss moving it in the direction of the trade. If the price meets the stop level (135,5) without reaching the order (127,5), we recommend to cancel the order: the market sustains internal changes that were not taken into account.

Technical Analysis Summary

Sell stopBelow 127,5
Stop lossAbove 135,5

Start trading with IFC Markets

We are ready to support you with any kind of questions, 24 hours a day.

Note: This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.