Saturday, December 3, 2011

Reversal day

Market got close to the downtrend line (around 1265) but then went down. This is a bearish movement indicating that this week rally is close to an end. However, if market manages to go above the downtrend line and especially manages to establish a new high (above 1,290) then bulls are going to be in control for a decent period of time. It all depends on the European saga.

Weekly DMI continues to stay negative despite two powerful rallies we had since the beginning of October. Daily DMI on the other hand has turned positive once again. Remember DMI is a non-price type of indicator, it only takes into consideration the lows and the highs made during the previous day (or week) and gives information about the direction and the magnitude of the trend.

I added a few more stocks to my watch list. I don't own any of these stocks yet since I am waiting for something to happen first, a move above or bellow a trend line, a move above a moving average, weekly DMI changing direction...

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