Tuesday, November 14, 2006
Trading Education
Tutorial
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.
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NASDAQ Chart of the Day
MSCC
has formed a clear inverted head-and-shoulders pattern and is now testing the
neck line (resistance) of the pattern at 20.85. A solid break through the top
of this pattern could spark a solid rally in this stock.
Daily Trading Signals
NYSE Chart of the Day
JAH
is winding up within the boundaries of an odd triangle range, although a
breakout from this formation could spark big movement. Watch 37.00 up and 35.00
down for a solid breakout.
Daily Trading Signals
Daily Market Commentary
Updated Monday, 11/13 for Tuesday's market.
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Key DOW Levels for 11/14
|
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UP
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Above 12,165
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DN
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Below 12,075
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Rally & Hold...
- Dow rallies at Open, consolidates to the Close. After rallying
80 points to begin the day, the Dow traded quietly sideways the rest of the
session to eventually close with a 23 point gain.
- The NASDAQ and S&P each rallied early in the day, followed by sluggish
range movement the rest of the session. Each index is on the brink of a
potential breakout. Watch their respective ranges for signs of a clear breakout
soon.
Summary
The Dow ended the day within the boundaries of a tight consolidation after
rallying early in the session. The index is now winding up within the
boundaries of clear triangle that could prove to move the market soon. Look for
more range movement within the boundaries of the triangle before a possible
breakout is seen.
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