Friday, June 24, 2011

June 24th

The market started off today with another drop followed by debt concerns in Europe, especially in Italy. Although there is nothing new about this, we are in a very volatile market now, any good or bad news, albeit inconsequential, may impact the market. Again, I expect strong corporate earnings coming up and I still believe this is an intermediate correction as opposed to a bear reversal.

Trade today is CPIX, and trade signals are:
1. Very clear Falling Rectangle, one of the most bullish chart pattern. What's better, this pattern was formed during a more than 2 months period, boding well for a bigger move in the near term.
2. ADX kept falling during the formation of the falling rectangle to below 15 and it started trending upward a couple of days ago. +DI crossed over -DI and the distance between +DI and -DI is widening.
3. Positive Divergence of MACD line and Price. Price was forming lower highs and lower lows but the MACD line didn't form lower lows. This could've been a more powerful divergence had the MACD Histogram showed the divergence as well.

Trade taken: Long 1/2 position @5.65, another 1/2 position @5.50 for an average cost of 5.58.

No comments:

Post a Comment