Thursday, March 03, 2011

Technical Picture - Accumulation Day

The markets gapped higher on better than expected initial claims in anticipation of a good jobs report tomorrow. We had broad based buying (accumulation) across most sectors except precious metals which are affected negatively on good jobs data due to higher interest rates. Subsequent downticks in oil off of overnight highs also contributed to the bullish tone. Bullish price action persisted until late afternoon. Small and midcaps outperformed today.

In reviewing my usual suspects charts EOD, I don't see a lot names that hit it out of the park today, the exception being momo stocks which had big Q1 earnings gaps and maintained relative strength throughout the recent pullback. Names such as ARUN, PNRA, TUP, TBL, PCLN...

A weak jobs report could set the tone for some early downticks, however, it's how we close that's more important - how we close the session and the week. I'm not saying that investors will be indifferent to a lousy jobs report, I'm just wondering if today's momentum will carry-over into the end of the week despite a weak jobs report. The bears have made their presence known over the past two weeks and until we make a higher high, I'm still leaning bearish.

ARUN formed a bullish handle at the base of resistance and pushed through to the next resistance by midday.

AGU formed a C&H with a very tight handle for a rally into the close.

JDSU printed NR7 NRIB on the daily. I'll be watching for expansion tomorrow.

7 comments:

flare9x said...

Hey

Good blogging! Quick question - what does - NR7 NRIB mean ? thanks

Ken said...

That ARUN intra was a beautiful setup, right under PDH. Nice trade.

Jamie said...

Hey flare9x

NR7 is the narrowest bar over the last 7 periods and NRIB is narrow range inside bar. They signify price/volume contraction which usually foreshadows price/volume expansion.

Jamie said...

Thx Ken,

ARUN has clean lines so it is easier to plan the trade.

flare9x said...

Jamie

thx man - was a sweet little pattern - super move today

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