Sunday, July 22, 2012

DJIA and Nasdaq 100

DJIA and Nasdaq 100 for the week starting 23-Jul-2012

Towards the end of last week, better-than-expected earnings were in trend and market was trading sideways on Monday then traded to highest 12977.57 before market settle down at 12822.57 pts.

Next week, earnings will continue to catch the attention of investors and euro zone crisis will also share the spot light. Among all, it start from Tuesday from Facebook earnings, Fed Chairman Bernanke speaks, and Flash Manufacturing PMI for July 2012.

Technical Forecast

From Weekly chart: DJIA has found its support strong 12500 and the support moved up to 12650 but resistance stays at 13000 levels, this means DJIA was trading in an ascending triangle. While another weekly candle formed, we are moving towards the end of this sideways market.

Weekly Chart:

Daily Chart:
Here we are near the end of July and as what I mentioned in the weekly chart, we can see the consolidation pattern better and we are really close to the end of current trend.

While market has moved up the support level higher each week, we reckon support for this week stays at 12700 and resistance stays strong 13000.

Trade for the week:

Market is going to trade in minimum range on Monday as there’s no announcement, it is likely to be under pressure towards 12750 (EMA50 on 4H), market shall not breach 12700 to complete this cycle. Towards the announcement or FOMC statements an many other Euro Zone PMI data, market shall trade sideways challenging the top 12900-13000.

Trade at main support / resistance with 50 pts. SL and target exit EOD not more than 2 days at day range.

The next move:

Once the market has accumulated enough strength, there shall be a breakout either breaking above 13000 towards 13350, or breaking below 12700 and go down towards 12500.

Nasdaq 100
The chart pattern is different for Nasdaq 100, market has formed a new high last week and currently a technical correction is desirable while expecting the earnings from Facebook and Apple.

Current support 2600, Strong support 2585.

Enter long at 2610 is desirable on Monday SL 10 pts. away target exit 2630, if market manage to stays above 2618 on Monday closing, you might want to hold on to Long until Tuesday expect market to make another surge up to form new high. Abandon Long if market traded below 2585.

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