Monday, January 15, 2007

Stockcharts.com: Weekly review

A relatively quiet week for the Stockcharters - an unusual lack of interest in the technical breakouts of Tech indices/Qs.

Ted Burge opened with an interesting chart on United States Oil Fund (USO). He has marked support at $43.55 and there was a nice bullish harami at support. Ted has a website: www.tic-tac-dough.com , which has further information.



Although Jack Chan sees little love:



Matthew Frailey has updated his list and is going with a bearish wedge in the Dow Jones Index. He also notes the bearish divergence in the MACD.



but is bullish over the longer term:



He also has a long term upside target for the Nasdaq at 2000 spring/summer reaction lows:



Robert New has led with the Nasdaq breakout (one of the few to do so):



Highlighting the thin level of resistance to the 2,900 area (similar to Frailey's target):



Although it hasn't broken yet, there are a couple of negative divergences in the S&P to watch:



Interestingly, Robert is looking for Transports to lead in 2007:



Richard Lehman has illustrated a new uptrend channel for the Nasdaq:



part of a breakout in a larger 3-year channel:



A similar move is taking shaped in the Russell 2000:





Michael Winfree has kept this Qs chart on his front page - not the proximity to resistance:



Maurice Walker has a number of interesting charts which should be checked out on his public list.

As with Frailey he is looking at a bearish wedge, in combination with a potential bearish head-and-shoulder pattern, in the Dow:



A cup-and-handle breakout in the Nasdaq:



and a breakout in the Russell 2000 (note bullish divergence in MACD histogram, but bearish divergence in RSI):



I will finish with his weekend commentary:

The Nasdaq continues to lead the way as the rally continues to gather steam. Other indices will follow suit next week with possible breakouts on the SP 500, Wilshire 5K, RUT, MID, NYSE, and the SOX. The SP 500 & Wilshire 5K are ready to break through Rectangles, while the RUT is sporting a Bullish Flag, MID caps are about to breakout of a Cup w/ Handle pattern with 822 as the pivot point. The Dow is forming a Rising Wedge that could eventually lead us to our target of 12,757, which was calculated from its last Triangle formation. The Nasdaq tagged its 2496 conformation projection and is now above 5 percent of its Cup pattern. The Cup pattern is now considered technically validated.

Many sectors have had huge run ups an continue to make new highs. Some strong sectors include Media, Computer Hardware, Banks, Retailers, Life Insurance, Airlines, Medical Equipment, and Chemicals. Enter these sectors knowing they will rise short term. But once our rally completes we could get a correction and we will be able to get aggressive on the short side.

I am excited about a new ETF chart that tracks and should mirror Crude Oil. The ticker is (OIL, pg 14) and it is reasonablely priced. Once Crude Oil has bottomed many traders will ride it back up to 64 dollars a barrel only to sell, at that point a right shoulder could develop. After a Head and Shoulders pattern forms we could rise back near 70 or 75 again. OIH could rise back to 150 from our oversold level.

Toll Brothers which is a home builder is our pattern of the week/ A Head & Shoulders top. See the first chart below. The Housing sector formed a bubble like the Market did in 1999. Many other home builders formed similar topping patterns in the summer of 2005 (see commements under chart). Please vote at the bottom of the page. The best of trades.


 
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