Price is showing a short term weakness on a back of positive long term picture. The question is, was Monday's price action a blip and making a base for next upleg or the beginning of correction of at least December rally.
The longer term picture looks up especially after trading above 11200 for 3 weeks now (chart 2 & 3). Therefore, the weakness on Monday can be interpreted 2 ways. It could be a start of correction as:
1) Price broke below Friday’s low and failed to trade above it (red line in chart 1);
2) Weakening momentum with lower high of RSI in both 30 mins and daily chart.
If that is so, price should close below Monday’s low, preferably below 11400 support. Retracement levels are 11300 (38.2%), 11220 (50%) and 11150 (61.8%).
It could also be a base building as:
1) Long term trend is up;
2) RSI is most oversold since start of Dec rally (chart 1);
3) S&P 500 continue to print higher close; and
4) It has only been 15 days since Nov low, upcycle can accommodate further upward movement.
If so price should trade back above Friday’s low and eventually break 11520 high.
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