Weekly Technical Analysis (week ending 17th June, 2005) for US and Indian Stock markets
Indian Markets don't seem to give up at all. Last week too, they continued their uptrend. But we are Definitely at a very crucial level and it would be a very interesting week ahead. US Markets finally gave a more clearer indication of where they are headed to, at least in the shorter term. We had a Minor Bullish breakout in Dow last week.
(PRWEB) June 22, 2005
Indian Market.
Markets don't seem to give up at all. Last week too, they continued their uptrend. But we are Definitely at a very crucial level and it would be a very interesting week ahead.
Positives
All indicators intact, near the Overbought levels.
Negatives
MACD dangerously close and looking to cross below.
Analysis
Ok, so it was another good week for the Indian market. We are up nearly 13% in nearly 2 months with no real reasoning or catalyst which can justify this move up. Not that we do NOT like the indices to keep moving up. But something that goes up too fast too soon is always a matter of concern. If we do NOT have correction that is fine. But at least there MUST be some sideways consolidation for a healthy run up. Neither of which happened until now. Many might believe that a good Monsoon season would be a triggering factor and it may help the indices move up. But we believe that all the good news is already priced in. Moreover, taking a look from Fundamental point of view, Valuations are bit too stretched at this point. Hence, going forward, putting all of these into perspective, we believe that markets will have to rest a little before any run up, if there is one.
In the chart below, the black lines are the major support and resistance levels, other than the regular support and resistance prices. If we break either one, then the ride would be drastic.
Take a look at the Chart
"http://stocks. dlngroup. com/gifs/bse_jun_17.gif" (http://stocks. dlngroup. com/gifs/bse_jun_17.gif").
Outlook
As was suggested in our previous week's analysis, we still suggest NOT opening any new trades at this point. Because of the above analysis. We are at the brink of a major "breakout", since there is no resistance above the last known resistance right now. But again, the huge(13%) run up itself speaks for the bullish-ness that has been around. We would keep a close eye on what happens and if we break the 7000 barrier, we would definitely go long, as we may be in for a big ride above it. To assist with breakouts this weeks article too focuses on this topic.
US Market
Markets finally gave a more clearer indication of where they are headed to, at least in the shorter term. We had a Minor Bullish breakout in Dow last week.
Positives
RSI Improving.
MACD Crossed above.
Negatives
Extremely Overbought.
Analysis
Markets have been in a consolidation phase for a little while now. Everyday they test a high and a low and close very near the open with a positive bias. Dow in particular. Finally towards the end of last week, DOW broke past the minor resistance/overhead(orange line from the chart below) which it has been testing for a little while now. This is very bullish and we expect to see good run up, at least re-testing it's recent highs.
Take a look at the Chart
"http://stocks. dlngroup. com/gifs/dow_jun_17.gif" (http://stocks. dlngroup. com/gifs/dow_jun_17.gif")
Outlook
We are really finding it difficult to say which way markets might move. Though technically and otherwise, we are very bullish, but other concerns force us to rethink our strategies. Take a look at the article below.
"http://biz. yahoo. com/ap/050617/economy. html (http://biz. yahoo. com/ap/050617/economy. html)?.v=15"
Now, this is an excellent example of "Mixed signals". Markets are reacting to a bad news in a good way. Look at it this way, at the end of the month you get your Credit card bill that says $2000. And looking at the bill, you jump up in joy and go out shopping for a 60" HDTV costing another $2000. Really hard to explain. This is the very reason, it gets difficult to explain the current US markets. If you are long, Hang in there and keep a close watch on how the market reacts in the following days/weeks.
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Http://stocks. dlngroup. com (http://stocks. dlngroup. com)
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