Analyst picks for 20 March 2012


My pick: Looking to buy euro-Swiss franc
Expertise: Combining fundamental and technical analysis
Average time frame of trades: 1 month to 3 months

It’s hard to ignore the Swiss National Bank’s SFr1.2000 floor on the cross and the ability for the market to remain so well supported ahead of the barrier. Still, the market is technically in the process of carving a major bottom on the longer-term chart, and we continue to project additional upside from here. Favourable yield differentials also don’t hurt. We will look for a break back above SFr1.2100 to confirm and accelerate gains towards SFr1.2500. Below SFr1.2000 negates.


My pick: Long WTI crude oil (pending)
Expertise: Global macro
Average time frame of trades: 1 week to 6 months

Crude oil is aiming higher, as signs of a US recovery and tensions between the West and Iran stoke supply disruption fears. Short-term mitigating factors like promises of talks from the EU foreign affairs chief and a pledge by Saudi Arabia to offset a supply drought are unlikely to help for long. Talks have dragged on for years, while Saudi suppliers don’t have access to a comparable delivery outlet if Tehran blocks the Strait of Hormuz. I will enter long on a daily close above $107.35.


My pick: Short euro-dollar; long euro-Swiss franc and dollar-yen Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day to 1 week

Both the dollar-yen and euro-Swiss franc longs I’ve carried paid off this past week. I’m trailing the stop up on dollar-yen and didn’t take profit pre-SNB, so this one will take some time to drive again. I still like the reversal potential for the S&P 500 going forward, but perhaps a more active play would be a potential reversal from euro-dollar. There are many short-term opportunities here, but a $1.3000 break is my week-long focus.