Dow Jones rebounded from its low of 6440 set on 9 Mar 09 to end at 7278 yesterday. That is about 13% rebound in the span of 2 weeks.
The rebound has taken the index right up to its 50 day moving average. Last night the market was not able to take out the 50 day moving average. That is not a good sign. However, it may turn out to be just a pause before the index attacks its 50 day moving average again. A lot will depend on whether there is any good news to lift the market next week. The index has fallen back into its downtrend channel and if it is not able to go above it's 50 day moving average next week, the downtrend will resume and index may test the low of 6440 again.
The 7392 level now serves as a critical resistance that the index needs to overcome in order for the rally to continue. Support level is at 7041.
The rebound has taken the index right up to its 50 day moving average. Last night the market was not able to take out the 50 day moving average. That is not a good sign. However, it may turn out to be just a pause before the index attacks its 50 day moving average again. A lot will depend on whether there is any good news to lift the market next week. The index has fallen back into its downtrend channel and if it is not able to go above it's 50 day moving average next week, the downtrend will resume and index may test the low of 6440 again.
The 7392 level now serves as a critical resistance that the index needs to overcome in order for the rally to continue. Support level is at 7041.
This is not the time to establish huge positions. It is best to let the market decides which way to go below going in for the ride up or down.
3 comments:
Hi, do you think there is further downside for STI to the level of 1200 to 1300. Now everyone is saying the bottom is over.Cause I already miss the downside of STI 1400+ during March 9 and 10. I want to buy some blue chips, but all had went up now. What a waste!
The technical indicators have turned in the favour of the bulls. The critical thing is to look at whether the 50 day moving average is able to provide support for any pullback. If the index is able to bounce off again from its 50 day moving average, there is an opportunity for the index to test 1900 level.
Great chart
Post a Comment