It is time to update Top40 daily chart in order for us to see what the odds are for this new week.
Last week we had 5 green days and all together seven in the row so far. I really don’t have to point out who is winning the battle currently. Top40 is very close to year to date high, which is around 26000 and the odds are very good that we are going to test that level. At the same time, 26000 is 61.8% Fibonacci level for bear market from May to November 2008.
Stochastic is very high, but it can stay high in the prolonged trends. RSI is high as well, just short of 70. MACD is above 0 line and is pointing to more upside. There are no major negative divergences and for these to happen Top40 should reach new high.
If I remember correctly, Top40 made 9 green days in a row few years back, and as well 9 red days in February 2009. So, there is a possibility for more upside to come.
Moving averages, which help us to determine long, medium and short-term trends:
- long-term (200sma) - UP
- intermediate (89sma) - UP
- short-term (10ema) - UP
Bulls are controlling Top40 so far. Don’t try to short this market based on end of the day chart.
Trade with trend!