DOW
As anticipated previously, the long term Downtrend Line for DOW is holding quite nicely. DOW was seen retracing with a red bar on the 11 May 2009. Should this resistance fall, the next resistance thereafter will be around 9020 (Long term Fibo 38.2% Resistance), which conflux with Major horizontal resistance at 9030.
At the present moment, DOW is resting precariously on the 20-Days Moving Average. The closing on last Friday has seen the index breaking out and violating the current Uptrend Line. Should the 20-Day Moving Average and Psychological Support of 8000 fail to hold, we would probably see a fresh bout of selling down. In fact, bearish divergences are seen on the MacD, MFI and Stochastics.
Important Levels to Look Out for:
Confirmation of Bullish Trend to continue:
- Price rebounding from 20-Days Moving Average (MacD Histogram showing 4r1g signal)
Confirmation of Bearishness:
- Price breaks out of 20-Days Moving Average
- Price breaks Psychological Support 8000 points
*Let's observe if the old adage of "Sell in May and Go Away" will come into fruition.
STI
We observe a similar pattern for the Straits Times Index, where the price was resisted by the Long term Downtrend Line on 11 May as well. The gap resistance at 2260 - 2290 was closed as well, and price is currently seen retracing from these levels. The next level of resistance will be at around 2400 (Long Term Fibo 38.2% Fibo Resistance). Price is currently seen closed with a black candle from last trading session but is slighly higher than Thur's session. Using a short term Fibo retracement, this confluxs with a Short-Term Fibo 38.2%.
Important Levels to look out for:
Confirmation of BULLISHNESS:
- Price breaking out of Downtrend Line
- Price rebounding from 20-Days Moving Average
- Price rebounding from Major Resistance turned Support 1970
- + MacD histogram (4r1g) signals at these levels
Confirmation of BEARISHNESS
- Price breaking below 1970
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