Stock Trading Predictions & Technical Analysis: Dow Jones - Sell Signal Fails, possibly heading higher

Monday, November 16, 2009

Dow Jones - Sell Signal Fails, possibly heading higher

Dow Jones - BUY SIGNAL

The Dow's previous SELL SIGNAL has failed. The Dow Jones has started to cross through some strong resistance and may now be heading higher much more quickly. If the Dow Jones gets close to 10500 and over, we will have a STRONG BUY SIGNAL. At this moment what I would accept to see is an acceleration of the current strong up trend, where we could possibly see the Dow Jones move quickly towards perhaps 11000 and 11500. However, I do advise to be careful as if it does indeed move faster upwards, the pullback may be as sharp. The Dow Jones for now is giving us a BUY SIGNAL, possibly becoming a STRONG BUY SIGNAL with any other strong move towards or over 10500. Another possibility is seeing the Dow Jones have a few small pullbacks annd moving sideways with support that is now building at 10300. What may be happening right now is the beginning of a new trend, which for the moment may still be up. However, the current channel for which its been trading in the last few months may now shift to a new trend, which may make things more difficult to predict. We may need to wait a few sessions to really establish where the new support or resistance levels may now be. However, it's too early to say and the Dow Jones could still pull back from here and continue within its channel.

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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.