Looks like the index has now reached its highest level for the year when it started to fall last week. The downward action of the index was expected because the market has long been overbought since the last week of November.
The index crossed lower than the 10 day Moving Average, the next support would be near 5650 which is an extension of the previous support since last Sept and then the next support level is at 5511 which is the 50 day Moving Average.
Expect a long sideways movement for the index on January once it finds support because it is unlikely that the index will continue with its recent bullish action, given that the MACD, RSI and Stochastics are all going or opening down.
PX (Chart: Daily Resistance: 15.30 Support: 14.50/12.50)
Since the mine tailings disaster that PX got involved in, the stock was something to avoid. But with the recent market activity for this stock, it seems that there a new lease on this stock’s chances of making some big money.
Recent market activity showed a possible inverse head and shoulder formation. The left shoulder and head is already formed, and with the brewing downward action of the market, it might help with the right shoulder formation. But breakout might not happen until after 2 months, as the left shoulder and head took about 2 months each to be formed.
This is definitely something to watch out for, not just for the possible area formation, but also because of the recent spike in volume since the start of December.
If the inverse head and shoulder materializes, the possible upside target would be somewhere near 18.00.
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