QBE had a head and shoulders pattern that has played out which was not dissimilar to the patterns we saw play out on some of the banks (NAB was a good chart example)...what is a bit discouraging is that when the banks hit the bottom they went "boinnngggg" as opposed to QBE that went "Splllttt". It is not uncommon when a head and shoulders plays out for price to then rise to test the neckline from the underside even if more downside is to follow. The banks are now well on their way to achieving this where as QBE is still hovering around the bottom....
One explanation could be that Australian markets generally have a bounce well under way where as the US is still forming a bottom...I think Aussie markets may have got ahead of themselves in the fall and hence were the first to recover. I think it quite possible that the US will rally from here even if there are more dramatic falls coming later in the year....perhaps if the US starts to rally then so will QBE...at this stage I think a target of around 16 to 16.50 (around that neckline area) could be possible before the next round of market falls...that is if there are in fact anymore falls coming.
QBE Price at posting:
$13.23 Sentiment: Hold Disclosure: Held
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