The index moved higher for the trading last week and it was able to recoup more than half of the downward movement for the past 2 weeks. It was quite strong considering that we only had 4 days of trading last week.
This recent action was the least that I was expecting. I was expecting either a continuation of the sideways movement or downward movement considering that the index has breached the support line of the channel or neckline of the triple top formation, but looks like the 65 day Moving average is providing strong support for the index preventing it from moving further downward.
As of current the index is just below a resistance line (connecting the troughs from Feb 9-Mar 25, 2010 with the peaks of Feb 18 & Mar 10, 2011). The next resistance after that is the standing resistance line for the triple top which is around 4340.
I’m not so sure how the index would move next week, but in a general sense, we are still on a sideways movement, trading between 4340 and 4130, a much wider channel than before.
The current state of the index could either spur an ascending triangle, an inverse head-and-shoulder, or just a simple sideways channel. So it’s anybody’s guess, which means, with either of the possible formations, we could still be in for longer sideways movement.
For the coming week, range trading is recommended since we might be in for longer sideways movement, but definitely keep your positions at the minimum.
CEB (Chart: Daily Resistance: 96.55/ 100 Support: 82.80/90)
Looks like there is a window of opportunity for CEB, as of last Friday’s trading, the stock may have formed and broken out of a flag formation.
Measuring the height of the pole ( run up from June 15-17), the probable target price for this break out formation is near 100.
The stock could still go beyond 100 if we would consider the small inverse head-and-shoulder formation that may also breakout, in line with the breakout of flag formation.
In a general outlook, this stock seems to be promising even for the long term as we can see that it is now able to create higher lows, considering the successive downward movement that it made from the start of its IPO trading up to Feb 2011. We might be seeing the formation of the 3rd count of the Elliot wave.
No comments:
Post a Comment