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Tuesday, Oct 9, '07:
Good evening,
The market indices gained further ground today; the S&P-500 and the Dow Industrials made new all-time highs and the other indices variously made new major and/or local highs.
Tonight, we'll look at a couple of indices that have lagged the general markets and are likely to want to catch up. If so, these arenas are possibly going to provide the best bang for the buck in the coming weeks.
Transports... |
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DJTA finally managed to bust out above resistance at 4950 two days ago and has being retesting that level over the past two days. Volumes were high today and hopefully that's a sign of a resumption of interest in the sector.
The Upper Bollinger Band is starting to rise and that should allow room for prices to move higher, if so willing. RSI and MACD have made positive centerline crossovers and such developments are usually the first sign that a market is about to get into stride.
Utilities... |
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UTIL has enjoyed a decent run-up since the August bottom, but has only now come up to a significant level of resistance, on the intermediate trend (remember, this index actually started declining in mid-May.
RSI and MACD are started to pull away from their respective centerlines and so, all in all, the index should be able to push itself past intermediate resistance at 521 and up to major resistance at 536, if not well beyond.
Retailers... |
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DJUSRT has bumped up against resistance at 383 several times over the past 2-3 months without being able to break above that level. RSI and MACD are now above their respective centerlines, which is a sign that momentum is moving towards the bullish camp. A breakout above the aforementioned resistance level will complete an inverted head & shoulders pattern that provides a target of 413, which is a tad above major resistance at 407.
As we've seen from the last three charts, now every sector has gone berserk over the past few months. Thankfully, some have continued to churn and build energy that could fuel the next upwards leg in the markets.
Sector rotation is a major tenet of successful investing. It may be time to start lightening up on holdings in arenas such as tech and oil and delving into those highlighted above.
Goodnight and have a great trading day tomorrow!
Asher Pinto |
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