The NAB results released this morning look broadly in line with market expectations. However, NAB heads into its ex dividend season with the chart outlook showing signs of potential weakness

Here are some technical factors that say the NAB price could be vulnerable

  • It’s blipped under the 40 week moving average again. This average has done a good job of defining the last major uptrend that got underway in mid-2012 (a couple of minor false starts excepted)
  • The slow stochastic indicator shown in the box under the chart has just dropped below 80% and is trending down. This provides plenty of scope for ongoing downward momentum.
  • The rally from $21.95 to last November’s peak at $37.07 looks to have taken the classic Elliot 5 wave structure. This  suggests a deeper correction of this whole rally is a possibility

NAB CFD Daily  Click to Enlarge NAB CFD Daily
Click to Enlarge

The next few weeks may be interesting. These technical factors may not come into play if price manages to hold around its 200 day moving average. However, if selling starts to develop this looks to me like one of those situations where downward momentum could be quite significant.