NCM enjoyed a surge in price today after it posted a H1 profit of $320m, which beat analyst estimates of around $300m. The daily picture now shows a close above 24.36, the 61.8% retracement of September 2012 highs. It would appear that a reverse head & shoulders pattern has now emerged, with the 24.36 level forming the neckline. This could potentially trigger a breakout towards the 50% levels of 25.43 in the near term, however the 200DMA which sits currently at about 24.90 may provide resistance on the way. Another positive sign for bulls will be a potential golden cross of the 20DMA & 50DMA, which incidentally have acted as a supporting springboard this week for NCM. MACD looks to have reached an inflection point, with bullish divergence increasing.
The weekly chart may suggest more room to the upside, with the next key level of resistance up at 26.22, the 23.6% retracement of November 2010 highs. We would expect at least a test of the falling overhanging resistance in the coming few weeks if NCM is indeed reversing. If NCM can reclaim levels above 26.22, this may prove to be bullish longer term by confirming a stronger reversal is in play.
The hourly chart shows a failed break of rising support, with NCM sitting in the middle of the uptrending channel after rebounding off the key 23.25 level. There is ample room to continue the trend now, however MACD may be nearing a peak with its surge today.
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