Hello and welcome to CantosCharts. My name is Eoghan Leahy and I'm a technical analyst and trader with Fat Prophets here in the UK.

Today what we're going to have a look at is British American Tobacco and a potential set up for a long recommendation.

So first, we're going to start off with the long-term weekly Icihimoku cloud. Now again, when the price action and lagging line are above the cloud we're going to be looking for long trades and we have this here on the long-term timeframe.

Now, interesting, as we jump down to the daily cloud we can see that BAT is on its recent correction, dipped back below the cloud but is now testing this upper level of resistance.

So if we move in a little bit more we can see on the 60 minute now, so even closer timeframe. BAT has already broken through, tested the cloud of support and looks to be pushing on higher. So from a trend perspective we might we seeing the beginning of a new trend move for British American Tobacco.

If we look here at this top line chart is the price action of British American Tobacco whereas down here we have the price action relative to the FTSE, so that's the performance subtracting the FTSE's performance. And we can see it has really been underperforming the market since, well really since July-August, since the last leg higher. But over the last few weeks we're starting to see the stock pick up again versus the overall index which is quite a strong trend signal as well. We're starting to see this across a number of indicators.

If we look again to break this down, we can see the pullback quite sharp early on in January. Found support at the 200 day moving average, has since tested the 50 day, broken through it and come back and used it as support. So again, this is quite a positive price development.

We add in the MACD indicator, we can see here we have a positive crossover and we've just broken back above the zero signal line.

Again, these are all positive trend indicators which are also supported by the third trend indicator we like to use which is the parabolic stop and return.

So we're really seeing across a number of indicators some very positive signs here for British American Tobacco.

Now, finally, this is another very nice technique we like to use, the point and figure chart. If you don't use them, we would definitely recommend them. We can see previously the targets how they have been met with consolidation areas.

Again here 2,200 is the current kind of consolidation level. We've now generated a new upside target up in the 2,925 level. Now, these don't give time targets as for when they should be reached, but again, this is a very significant upside target.

We have a downside projection of 1,900, but should we see a move back above this 2,500 level, that projection would be negated.

Just to go back quickly, actually, what we would recommend is if you're trading this to maybe look to get long and a break around 2,450, 2,500 and you can maybe place the tight stop for traders down below this recent low down around 2,372, or maybe for longer term investments down here below the 200 day moving average around 2,250.

Okay, so maybe take a look at that set up in British American Tobacco. Hopefully it could result on a positive long trade.

My name is Eoghan Leahy. This has been Cantos Charts. Please join me tomorrow, we'll be having a look at the prevalence of head and shoulders patterns that haven't actually worked out in the FTSE 100. So it's an interesting chart there. Okay, thank you.