The index reached a new all time high last week, and none of the negative divergences were seen in the different indicators. This is a good sign for the index, however, there is only one stumbling block to the index’s ascent, and that is the existing resistance line connecting the lows of June and July 2012.
The index was able to move above that resistance line last week, but it was unable to maintain its foothold and closed below the resistance line.
The standing upward channel formation still holds and it might be that the index would be moving within that channel, between 5480 and 5350.
Except for the RSI, which is now on overbought level, all the other indicators does not show any negative sign for the index. So I guess this might be the start of the index’s bullish movement, all that is left blocking is the resistance line.
GMA7 (Chart: Daily Resistance: 9.30/8.99 Support: 8.20/8.00)
The chart clearly shows the effects of the news release of the failed talks regarding the sale GMA.
Technically, the stock broke down from a downward channel and its target price has been reached last Thursday. This stock is definitely something to avoid, but for the fast draw traders out there, this is an opportunity to take advantage of the possible bounce that could happen for this stock, considering that the RSI is now at 13, far way below the oversold level of 30.
We could see the stock retracing back to near 8.99 before being stopped by the resistance line of the channel where it broke down from.
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