The index moved sideways last week and regaining losses on the last trading day.
As of current there is no significant area formation except for a possible rising wedge and this formation seems to be supported by the RSI and the MACD as of the moment. The RSI is near overbought level while the MACD has crossed below the signal line.
One good thing to point out though is that value turnover on the days when black candles are formed are significantly lesser than value turnover for days when a white candle is formed. This may mean that the bears still do not have the full strength to pull the index downward. But on the other hand, value turnover on the white candle days are noticeably lower than those from the previous 2 weeks which may indicate weakness in the upward movement.
For next week expect a short upward movement or sideways movement for the index. A resistance line is now established at 4580 ( connecting the previous peaks). There is lesser possibility for the index to breach that resistance line if the value turnover continues to be lower than what we had last week.
ISM went very bullish and created large spreads and gaps on the last 2 trading days for last week. On both days, the white candles were accompanied by very large volume.
This stock is definitely bullish, however, on the last trading day, the stock was not able to create a full body for the white candle, which means weakness on its upward movement.
For those going long on this stock, this definitely has the potential to go up to 8.00 level. But for those whose objective is short term, it would be best to sell for now and buy back probably near 4.00.
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