Wednesday, February 16, 2005

Naz meets converging resistance


I think the next couple of days may be a good time to add to short positions. Let me explain. The upper bollinger band has converged on the 50 day moving average and acted as resistance. The index bounced down off of this resistance today on above average volume. Even though the volume bars are black, I view the large volume days we've seen over the past week as churning and distribution because the naz has made very little upward price progress for the past two weeks. As usual, I will let the character of the sell-off I anticipate tell me whether I am right to be short or not. If the index does not under-cut its most recent low near 2020, or the index stages a powerful follow-through day, then I think it will be time to be a buyer of stock again.

1 Comments:

At 3:32 PM, Blogger Declan Fallon said...

I agree with your assessment on the NASDAQ - secondary indicators ($NASI in particular) really show the underlying weakness very well. The spanner in the works is the S&P which broke upside of a bullish flag with support from the MACD and on-balance-volume.

Best wishes,
Declan
www.fallondpicks.com

 

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