Stock Trading Predictions & Technical Analysis: Dow Jones - Moving up along the trend but at a critical level

Thursday, October 1, 2009

Dow Jones - Moving up along the trend but at a critical level

Dow Jones - HOLD (Imminent BUY or SELL signal)

Although the Dow Jones has seen 5 down days in the last 7, the trend is still up. I think we are just seeing some healthy pullback, and perhaps a few buying opportunities if it bounces back up. As I indicated exactly a week ago, the Dow did indeed pullback to 9500-9600, and now stands at a critical support level at 9500. The DOW is at a very strong support support level at its 50 daat about 9450. A clear break below 9400 would indicate the beginning of a correction, where the Dow could fall back as low as 9250 or 9100. I personally thing the DOW will manage to hold up at current levels, and will bounce back up. If indeed the Dow bounces back up, possibly tomorrow or Monday, I think there will be a lot of buying opportunities. The Dow also has strong support at current levels with the RSI and Stochastic. The Dow remains a HOLD for now. A big bounce up, perhaps of 100 points would be very bullish and a BUY signal. However it is preferable to wait for two consecutive up days, before confirming the BUY signal.b

4 comments:

traderOctober 1, 2009 at 4:42 PM
bought MGM @ 11.8
rf@ 6.6
wen @5.75
lcc@4.8
jaso@ 3.88

what is your take on these stocks?...can i hold them or sell

Thanks
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DBOctober 1, 2009 at 5:03 PM
Yoel,

As always, your blog is very helpful and gives us an approximate insight on what to expect next and take steps accordingly.

Thanks,
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YoelOctober 1, 2009 at 11:27 PM
MGM is a SELL, and could fall back as low as $9.75 before finding support.

RF is currently standing a moderate support level. We currently have a three black crows formation, indicating a reversal and the start of a down trend, and this would be confirmed if RF falls sharply below $6.00. RF is WAIT, with an imminent SELL signal. A bounce back up from current levels would be bullish, but we wouldn't have a BUY signal until it goes sharply over $6.85.

WEN is in a strong down trend which started about 5 days ago, and we have been getting consecutive SELL signals after it first crossed down its 50 day MA and now its 200 day MA. WEN is a strong SELL.

LCC is a WAIT, and is near a strong support level at its 200 day MA at $4.00. A bounce back up over $4.00 would be bullish, but if it falls below its a strong SELL.

JASO is currently in a down trend, it's currently a SELL. Its next support levels are at $3.75 and $3.25.
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traderOctober 2, 2009 at 10:39 AM
Thanks for your updates Yoel...
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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.