Monday, March 9, 2009

Technical Analysis

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Last Sunday in my "DJI Analysis" post I mentioned that the majority of my technical indicators were negative, yet with indication of strongly oversold market. As a result we witnessed further decline during the whole week.

By the end of the current week the technical analysis applied to the 60-day chart (1 bar = 1 hour) is more optimistic that it was a week ago. At least, we may see some indicators became bullish. By adding to it strongly oversold condition stock market is, I would consider that the odds are on the side of recovery. I think that starting from February 27, 2009 (biggest daily volume) everybody who was entering long position (buying) could be in profit soon. Yes, indexes have dropped about 10% down since then, yet, over the past year, in such volatile market, we saw indexes 10% recovery in 1-3 trading sessions.

Shortly, by taking look at my standard (see chart setting in may last week "DJI Analysis" post) set of indicators I may say that
  • SBV points to the strongly oversold indexes, yet, neutral at this moment;
  • MVO suggest strongly oversold indexes;
  • Advance/decline oscillator become bullish, yet, it would be wrong to say it strongly bullish;
  • MACD is Bullish;
  • RSI and Stochastics moved above 30 and 20 levels respectfully by pointing to possibility of bullish trend;
  • McClellan Oscillator is negative and points to higher odds of further decline.

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