Saturday, May 26, 2012

7 Interesting Charts for Tuesday



XLK: Very nice consolidation pattern with a nice inside day forming on Friday. look for volatility above or below the inside day.



XIV: Like the XLK, the XIV wants to explode on Monday, an inside day after consolidation right below a clear support level could send this stock in either direction.



TLT: Another consolidation pattern being a flag followed by a tight inside day right below resistance at 124.50. I will be watching this one closely because as explained here, a breakout in the TLT could have serious implications.



DXY0: Has already taken out resistance a couple of days ago. This is a huge warning sign that dollar strength is underway and that things could head south soon.



HYG: High Yield Corporate Credit had broken down and is now holding below support. Friday was the biggest tell-tale sign that this instrument will likely head south with a close below the 200 SMA. Its next target is the low of the swing low at 87.50, should that level be taken out then there lots of room to the downside.



SPY: Broke its downtrend (blue line) but failed to make any serious short covering rally. At this point this consolidation int the SPY can't be considered a bottom, the moving averages are yet to catch up to the move due to the severe breakdown that occurred. This move looks more like a bearish flag at this point with more down side to come with the next major hurdle being the 200 SMA.



SSEC-X: That Shanghai Index has been monitored closely ever since it broke its downward trendline and entered a consolidation/accumulation phase. I am still bullish Chinese equities despite all the negative sentiment concerning Chinese stocks due to its relative strength. Only price pays, everything else is irrelevant and is only a gauge for sentiment.  A breakdown from the yellow trendline could be the final push down prior to the mark up.









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