Monday, May 17, 2010

Top40 - end of the day recap for week ending on May 16th

Another “crazy” week for the markets. On last Friday market looked very bearish, with close below 200 simple moving average, but during the weekend EU decided to print few more Euros (or about 750 billion) to save Greece and the other problematic countries. Of course, market opened higher on Monday and ran some 1200 points on intraday basis. Tuesday was nothing special, but on Wednesday market almost repeated Monday’s action. On close on Wednesday market was up 1533 points from Friday’s close. Close was above 200 and 89 simple moving averages. Thursday ended as small doji bar and on Friday we saw similar action to last Friday’s: Market lost some 700 points and again swung back below 89 simple moving average.

Action over last couple of weeks is pointing to change in trend. There are three lower highs so far and if Top40 breaks below 23434 we will have definite conformation of bear trend. If that’s the case market will close below 200 simple moving average. Another level to watch next week is low that was made early in February – that is at 23111 based on close or 23072 based on intraday low. On the upside, be aware of break above 25299 (Thursday’ intraday high).

Indicators bounced a little bit with market moving higher last week. RSI and Stochastic are around 40-50 and MACD is deeply in negative territory (around -210).

Moving averages, which help us to determine long, medium and short-term trends:
  • long-term (200sma) - UP
  • intermediate (89sma) - DOWN
  • short-term (10ema) - DOWN
Trade with trend!


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