Tuesday, May 29, 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...
Read More...
Trading Ideas &
Picks
The Weekly Report for May 21st - May
25th - Tri-Star Pattern
As you can see from the chart of the Dow, three doji candles have
appeared, which is a technical signal of indecision that can often be used to
mark the end of a prolonged trend. Three consecutive dojis, also known as a
tri-star pattern, is very rare and it suggests that the uptrend is running out
of steam...
Trading
Picks - Read More
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
PAAS
is holding precisely at key support, which has been a fulcrum in the charts
since last November. Watch for a break or bounce of this level at 26.00 for the
next key move.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
HXM
is winding up within a large triangle pattern that could offer an explosive
breakout move soon. Watch 64.00 up, and 59.00 down for a potential move of
about 15.00 points.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Friday, 5/25 for Monday's market.
|
Key DOW Levels for 5/29
|
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UP
|
Above 13,650
|
|
DN
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Below 13,400
|
Pull-Back...
- Dow reverses after yesterday's decline, but remains near overall
lows. The index index eventually closed with a nice 66 point gain, but remains
well beneath the 13,550 zone and continues to hold near the overall lows of the
recent decline.
- The NASDAQ and S&P each pulled back nicely from yesterday's lows.
However, each remains well off the highs from two days back, which means this
pull-back could eventually become a continuation pattern. Watch the developing
ranges closely.
Summary
The Dow ended the day near the highs of the session, but continues to hold near
the overall lows of the recent decline, which implies more weakness ahead. The
Dow remains highly bullish within the longer term trend, but more of a
retracement could be seen before the bulls regain near-term control. Watch for
more weakness beneath 13,550.
Read More...
