Rising trends slowing; Transports and Semiconductors key

Richard Lehman noted the change in slope of some of the early bull trends off the November lows. The reversal off the 50-day MAs was a big negative for me as the indices made a half-hearted attempt at defending them. Are things going into lockdown up to Christmas? Early vacation takers might see today as the last trading day for the year...

I would like to see the Transports do more in the light of weak oil prices. Things to watch:

  • Stochastics turning oversold - i.e. future short term weakness needed
  • Consolidation triangle to break - with the 50-day MA pegged to triangle resistance it may be 'easier' for prices to break through support than resistance
  • For November lows to hold as support
  • For trend strength to continue its swing bullish, perhaps signalling a stronger start for 2009

    My other sector watch is the semiconductors. Yesterday's strong reversal off the 50-day MA was very discouraging.

  • Can the nascent rising channel hold?
  • Stochastics heavily overbought - this has to come back at some point and given their relative position it would appear very hard for the rising channel to continue to ascend the way it has.
  • Trend strength is more favourably bullish than for Transports; should help in the long run

    Expect light posting over the next couple of weeks. Hope all my readers have a good Christmas and New Year!

    Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website
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