Wednesday, August 01, 2007
Technical Indicators
Chaikin Money Flow
Developed by Marc Chaikin, the Chaikin Money Flow
compares total volume to the closing price and the daily highs and lows to
determine how many issues are bought and sold of a particular security. It is
based upon the assumption that a bullish stock will have a relatively high
close price within its daily range and have increasing volume. However, if a
stock consistently closed with a relatively low close price within its daily
range with high volume, this would be indicative of a weak security. There is
pressure to buy when a stock closes in the upper half of a period's range and
there is selling pressure when a stock closes in the lower half of the period's
trading range. Of course, the exact number of periods for the indicator should
be varied according to the sensitivity sought and the time horizon of
individual investor.
An obvious bearish signal is when Chaikin Money Flow is less than zero. A
reading of less than zero indicates that a security is under selling pressure
or experiencing distribution.
A second potentially bearish signal is the length of time that Chaikin Money
Flow has remained less than zero. The longer it remains negative, the greater
the evidence of sustained selling pressure or distribution. Extended periods
below zero can indicate bearish sentiment towards the underlying security and
downward pressure on the price is likely...
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Trading Education
Tutorial
Courtesy of
Nirvana Systems
Volatility
Well Behaved Stocks Reap Rewards
Some stocks move multiple points and multiple
directions in one trading session. Other stocks are more methodical in their
day-to-day movement. Which type of stock is more attractive to you as an
investor?.
Read More...
NASDAQ Chart of the
Day
Courtesy
of Nirvana Systems
NVDA may have formed a double-top
resistance level at 47.85 after steadily trending higher since March. If the
stock cannot rise above 47.90, we could see a key retracement soon.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
AHS is holding above a clearly
defined support level at 20.80, which has held firmly since March. If the stock
can continue to hold above this zone, we could see a nice bounce higher.
Otherwise, a break could send the stock tumbling.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Tuesday, 7/31 for Wednesday's market.
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Key DOW Levels for 8/1
|
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UP
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Above 13,500
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DN
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Below 13,200
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Pop & Drop...
- Dow opens strong, but eventually tumbles to the
Close. The index eventually closed the day with a 146 point loss and is now
testing the major 13,200 support level.
- The NASDAQ and S&P each sold off heavily from early highs. This action
sparked the formation of a potential lower high pattern, which is typically a
continuation pattern. Watch support for signs of more selling pressure.
Summary
The Dow closed the day at the lows of the session just above critical support
at 13,200. Continue to watch this zone closely for signs of a potential break
or bounce.
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