Tuesday, March 20, 2007
Technical Indicators
Rate of Change
Rate of Change
The Rate of Change is an oscillator that displays the difference
between the current price and the price x-time periods ago. As prices increase,
the ROC rises and as prices fall, the ROC falls. The greater the change in
prices, the greater the change in the ROC.
The 10-day ROC is an excellent short - to intermediate term overbought/oversold
indicator. The higher the ROC, the more overbought the security; when the ROC
falls expect a rally. As with all overbought/over-sold indicators, watching for
the market to start its correction before placing a trade. Often extremely
overbought/oversold readings usually imply a continuation of the current trend
and any overbought market may remain that way for some time.
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Trading Education
Tutorial
Courtesy of
Nirvana Systems
Moving Averages and the Trend
Moving Averages
Help Us Identify Trend Reversals
One of the old axioms of technical analysis is that 'the trend is
your friend'. This holds true, as long as you trade in the direction of the
trend. However, your 'friend' has two faces, and can turn on you to eliminate
profits (and your friendship!). Trend reversals can occur at any time and one
of the important skills a trader must possess is the ability to identify a
reversal. It is easy to exit a position too early if we over-anticipate a trend
reversal, and just as easy to watch our profits evaporate if we are too slow to
exit the trade.
Read
More...
NASDAQ Chart of the Day
Courtesy
of Nirvana Systems
PTEN
is holding at critical support at 21.45, which has held for many months. Watch
22.75 for more strength.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
ABI
is beginning to show some strength from lows after taking a modest breakaway
gap up Friday. While this may be an early signal of strength, it could recover
nicely if 30.60 is taken out.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Monday, 3/19 for Tuesday's market.
|
Key DOW Levels for 3/20
|
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UP
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Above 12,350
|
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DN
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Below 12,050
|
Pop & Hold...
- Dow rallies at Open, consolidates to the Close. The index
proceeded to trade sideways at the highs the rest of the session within a very
tight 30 point range, but still managed to close with a solid 116 point gain.
- The NASDAQ and S&P each rallied early, followed by slow and steady
movement sideways the rest of the day. Look for a breakout from today's
consolidation range for key direction tomorrow.
Summary
The Dow rallied solidly at the Open of the day and was able to hold gains to
the Close, which is bullish heading into tomorrow's market. However, the Dow
remains firmly implanted within the boundaries of the large trading range that
continues to span from 11,950 to 12,350. Watch for a larger breakout from this
range for major movement.
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