Sunday, April 27, 2008

Weekend Charts to Watch For Next Week

Let's start out with the indexes. There is little doubt the market is a bit overbought here and that the market is still right at resistance levels that they have had trouble getting through. That being said, they seem to be forming some bullish bottoming patterns, and if they do breakout above these levels, I would become much more bullish and look to put much more money to work. I have no clue if they will finally get above these levels, but bullish markets can stay overbought so it is possible.

S&P 500 and Nasdaq
Charts from Telechart2007, Courtesy of Worden Brothers, Inc.


Here's Telechart's T2108 indicator showing the percentage of stocks above their 40 day moving average. Just like readings below 20 show very oversold markets, readings about 80 show very overbought readings. We are closing in on that level.

T2108
Charts from Telechart2007, Courtesy of Worden Brothers, Inc.


One of the things that still bothers me about this market is that I continue to see stocks that have been strong and have been setting up decent chart patterns just get destroyed. GU is a prime example. These type of blowups shouldn't happen in great markets.


GU, ISIS
Charts from Telechart2007, Courtesy of Worden Brothers, Inc.


I have been mentioning that we need new sectors to start taking over leadership of this market if we are going to move much higher. Well, I saw the hospitals breaking out on Friday. Perhaps this is a signal that health care could be ready to take a leadership role.


THC, CYH
Charts from Telechart2007, Courtesy of Worden Brothers, Inc.


I am still bullish overall until evidence points to the contrary, so I am still looking at possible stocks to enter. I still don't see a ton of great ones ready to buy. ETF's are an option because of this. I have some charts below to check out.


CCK, CYBS
IDRA, DMLP
UYG, USD
Charts from Telechart2007, Courtesy of Worden Brothers, Inc.


These are all stocks that I am watching but need more rest before being safe to buy. If more of these setup, that would be very nice to see. Most of these are fundamentally sound stocks but just need a little bit more work.


DGLY, GSI, ANW, BEXP
SOL, CSIQ, MPWR, DRQ
Charts from Telechart2007, Courtesy of Worden Brothers, Inc.


Hockey is just about to start so I am out for today. Feel free to ask questions about any of these charts if you have them. Best of luck during the upcoming week.


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