Hello there. I'm Steven Mayne from Equitrade. Welcome to CantosCharts.

During today's session we're going to look at two stocks. To start with we're looking at United Utilities on the bullish side of things.

The first thing we should really notice on United Utilities is the 200 simple moving average. The 200 simple moving average is frequently used by chartists. We can see how on United Utilities that we've actually come down and found support once, twice and three times on the 200 simple moving average. So if anybody is trading long and they want to find some good entry points for this, really see any retracements back to this average to start buying in.

We also note from our general momentum indicators that we have a buy signal formed on the stochastic and we're actually in positive trend on the MACD with the RSI remaining above 50. So we've got some good indications here that the next move on this stock should be upwards. We've got a good idea where we can put our stop. So hopefully we're going to look for this to move back above £6, possibly back up towards the £7 mark.

Also with United Utilities, it s generally considered a defensive stock. So if there is uncertainty in the market, hopefully the downside should be reduced.

To just have an idea, we've got a positive candlestick pattern formed just above the 200 simple moving average. We've got buy signals on the stochastic. The RSI is remaining above 50 and the 200 moving average is acting as support.

Moving on to Halfords. If we've had one stock looking on the long stock, we're obviously going to have one stock on the bearish side of things. Now Halfords had a tremendous run recently. If we go back to the lows of 2009, we can see it is trading about £2.50. At the time of writing, this was trading about £5.10, a very, very strong run. Now would be a time for people to start looking to take profits on this stock.

We can see that we've actually got negative divergence on the stochastic and negative divergence on the RSI. If you're wondering what I mean by negative divergence, it is the price action is going higher whilst the momentum indicators are trending lower. We actually find generally is that when we start seeing these patterns, we're forming a significant top on the stock.

So if we are looking to go short on Halfords, really just going to have to put a stop above the last relevant high, initially target a move down to the 200 simple moving average. We can see how it has tended to it before, before starting to move away and hopefully will break the 200 moving average and we should have sharp moves back to about £4.

Just to summarise, with the recent highs formed with negative divergence on the stochastic and the RSI we have a current sell signal on the MACD already in place. So for people trading short, you want to put a stop just above £5.64 which was the last relevant high looking for a move towards the 200 simple moving average. If that's broken, a move back towards £4.

Thank you for watching CantosCharts. I've been Steven Mayne from Equitrade.