Friday, February 17, 2012

Bullish week

We had another bullish week with SPX gaining 15 points and consolidating its position. SPX has touched now the May 2011 high, while other indexes already made higher highs.  Weekly DMI remains positive and EMAs show a bullish crossing on weekly chart.

On daily chart it is easy to observe an very narrow trading channel that has start forming in December 20th last year. Any move above or bellow this channel is going to be significant in my opinion.

On hourly chart we still have a bullish EMAs crossing, with SPX slightly overbought (10 points above EMA 50). The intermediate time frame momentum is going to change only if SPX is going to move bellow SMA 120. By that time most likely we are also going to see EMAs giving a bearish signal. But until then enjoy the rally if you are on the bulls' side.

AAPL is going up like crazy these days. Since March 2009 AAPL is trading in a nice trading channel. Now has moved above this channel (that has the upper edge around 470) so I am tempted to say that the stock is around $30 overbought. The trick is that a move outside a well established trading channel may also signal that the stock has "decided" to listen to different technical parameters, in this case could signal that it may continue to move on the upside at a higher pace than in the past. Another signal that the stock may be overbought is that the weekly DMI is at an extreme value. Personally, I wouldn't buy AAPL at this point since it may go down to the uptrend line which is now around 400 (quite far away) without affecting its long term bullishness.

I am more interested in a stock like F that is now looking pretty good long term (at a beginning of a new uptrend), after a pretty nasty drop when lost 50% of its value.

Plenty other stock look attractive at this moment. I'll have a look at few of them next week.

All the best!


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