Saturday, January 22, 2011

Resistances Everywhere! - Market Analysis for 24th January 2011 by Singaporeseeds

Daily chart for Dow

Daily chart for S&P

Daily chart for NASDAQ

This is a good start to the New Year. The stock market rallied almost every day in a tight range. Things are looking good. However it seems that we are looking at some strong resistance levels over the next few days.

For the Dow, we are approaching the 12,000. There had historically been a range of resistances from 11,800 to 12,000. For the S&P, it is 1,300. As for NASDAQ, the resistance levels can be most easily observed, with 2,720 being the top of the shoulder when NASDAQ made a head and shoulder pattern at its previous high in 2007. I’ve drawn a cyan line indicating this level.

The stock market had been rallying in a straight up fashion since November 2010, I think the time is ripe for some profit taking before the next up move. I think the next few sessions will see the market facing some stiff resistance which it may have problems clearing.

Daily chart for the Dollar (UUP)

The dollar moved in a fashion that I think it should early this month. Nowhere. I think the dollar be moving sideways for the next few weeks.

Daily chart for Gold (GLD)

After forming a triple top pattern, gold is now in a downtrend to test support. The first support should be at its 200 day moving average at around 126 and then at its previous high at 122.50. However it seems to be only a short term dip. Whether it turns into a longer term downtrend remains to be see.

Daily chart for Crude Oil (USO)

Crude did a failure pattern and gapped to below the 50 day moving average. This is a very bearish signal. This is accompanied by a bearish divergence in RSI and MACD. We should see USO going down to around 36 in the next few weeks.

Daily chart for Natural Gas (UNG)

UNG finally broke to new highs on Friday. RSI and MACD also indicate that it is still good to go. First resistance would be at 6.80 and then 8.80.

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