Wednesday, July 14, 2010
Technical Picture - Rally Testing Key Levels of Interest
Another accumulation day after a solid start to earnings season. Price is now testing the downsloping trendline and the 50 SMA.
The S&P has rallied 8.8% already this month from intraday low to high bringing the numerous technical levels of interest into play. Despite the extensive six day surge, however, the market has a catalyst after hours (INTC earnings) for further gains in early trade Wednesday. An initial resistance above is in the 1105/1107 zone with a more important area at 1112/1115 (200 SMA/50% retracement of April-July slide).
Chips stocks should rally back to the top of the recent trading range.
Euro continues to show strength vs. $USD which breached its trendline on closing basis today.
Expecting Gold to breakout on next test of trendline.
AGU - Good example of one of my favorite leading indicators - MACD divergence. Positive divergence of MACD to lower prices foreshadowed a reversal. Price reversed sharply and has come into resistance of 200 SMA. I'd like to see a shallow retracement (38%) for entry of a swing trade long.
APKT forming an ascending triangle.