The index generally moved sideways last week with a slight upward movement showing a lot of indecisiveness as evidenced by the cross and short body of the candle stick. However trading last Friday was a little bit different from the previous trading days last week, as a considerable spread was made in the index accompanied with average value turnover.
For next week, expect the index to still continue with its sideways movement with a slight upward bias. Upcoming resistance is at 3920 which is also the level of the 65 day moving average. If trading by Monday is still accompanied by low value turnover, the resistance at 3920 would definitely pose a serious resistance to the upward movement of the index.
Trading for MPI last Friday saw a big spread in the body of the white candle accompanied by a large volume (56 million trades). This is definitely a reversal indicator for this stock.
Watch out for the following upcoming resistance areas; 3.35 which is the 260 day moving average; 3.45 which is the resistance established from Jan 2011; 3.60 which is the previous high and also the 130 day moving average.
With the large spread and large volume, this stock is definitely a buy, but it would only yield a small profit on the short term assuming the immediate resistance (3.35) holds its ground.
What we wanted to see is a follow through of the trading last Friday, with this stock moving higher in price, accompanied with increasing volume to confirm the upward momentum. If that materializes, we can expect the price to reach as high as 3.60 making a good amount of profit. However, if there is no follow through for this stock, where the stock moves higher with very low volume, OR, if sell down accompanied with large volume (20 million trades or greater) is observed when price reaches the resistance areas, then be prepared to sell your position.
MER seems to have broken out of a sideways channel. Target price for this stock is near 260. This is a very enticing buy considering the large spread and volume, however, at the current price, there is little room for profit for this stock.
Also, the stock is already near overbought level on the RSI, so expect this stock to make a return move towards 240 and 230 towards the end of this week.
Upcoming resistance areas also pose a problem for this stock. The three very visible large red candles formed last Jan 2011 would definitely act as strong resistance areas for this stock.
Search Amazon.com for technical analysis
No comments:
Post a Comment