Wednesday, November 30, 2011
Lots of pressure was in the markets, we had a consecutive 7 red days, some traders start looking again for the double dip, some get bearish and went short or sold and step away from the markets..
The Fibonacci correction is a healthy correction for every security or the markets after a long run up, we can see that the Fibo 61.8 used as a support, holding the price around 1,158, creating a reversal candle stick (Inverted Hammer) , and complete the reversal with a long green candle (Marubozu candle stick) to give the sign for the new uptrend.
Look at the indicators too, the Stochastics & the RSI was deep in the oversold zone, both changed direction to support the new uptrend breaking up the 50MA , now looking for the 200MA as a target price.
Today the price will find a resistance at the long period uptrend line (Green line) around 1,240 and after that will attack the 1,258 resistance line and very close to the 200MA.
If the price fail to breakup the 1240 point, we can see a technical correction for the last move, and we can see the price touching again the 1200 point, just before keep the real uptrend.
Breaking down the 1200 point will change the direction and I have to recheck the charts again
Have a nice trading week