The index’s situation slightly deteriorated last week. For the past 3 weeks the index has never gone below the standing support line of the sideways channel near 4290, but last week, the index breached that level forming a new low.
It looks like the channel might be redrawn/shifted lower, with the support near 4260 (130 day moving average) and resistance near 4360 (65 day moving average).
Trading strategy would still be the same, which is to play the possible range on certain stocks (for example DIZ) and not to hold your positions for long term.
Although the actions last week maybe a little bit discouraging, the index is still on a safe middle ground. I am just hoping that the index would be able to sustain the current sideways movement and not create a new low that is lower than the previous low of 4130 (Aug 9 low). If it does go below that level, then we may be seeing the start or confirmation of the bearish cycle.
NI showed a spectacular show of force Friday last week with the volume exceeding recorded volume since the start of this bullish trend for NI.
Looking at the weekly chart, we can see that the volume on the downward movement of the stock for the first 2 weeks of September is dwarfed by the volume of trades last week. This only means that the bullish sentiment for this stock is still preserved and may continue for this week.
I could not see any possible pattern to be the basis of a target price for this bullish activity, but basing on the Elliot wave pattern alone on the weekly chart, we may be on the 3rd wave. Usually the 3rd wave is the longest of all waves and measuring the length of the first wave as the minimum target price relative to the start of the 3rd wave, the 3rd wave could potentially reach at least up to 5.50.
Amidst the ranging movement of the index, this stock seems to go against general sentiment and is a viable candidate for going long. The MACD on both the weekly and daily chart seem to confirm the bullishness of this stock.
Again as with any stock, be on the lookout for dips on this stock that is accompanied by large volume (those that exceed 20M trades). If any such occurrences appear, then start unloading your position.
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