June 5, 2011

  • First chart shows the weekly trend line of SLV above which bulls are safe.
  • Second chart shows price struggling to hold on to the 20 week moving average. If closes below it convincingly price may start to decline towards the 50 week moving average.
  • Third chart is the daily time frame with 20 day and 50 day moving averages They are aligned bearishly. Price has managed to stay above 20 DMA But a rally if happens will find resistance at 50 Day Moving Average.
  • Last chart shows the range of SLV in daily time frame which is from 31.97 - 37.90. And the stochastic indicator is hinting a possible down move towards the bottom of the range in the coming days.
          WEEKEND CHARTS
  • First chart shows the much talked about resistance level of 5600 and the bearish engulfing formed on Friday at this level.
  • Next chart shows the possibility of an inverted head and shoulders pattern. But price should not decline more than 5420 - 5430 level for a valid right shoulder to form.
  • For bulls price should stay above 20 day moving average which will keep the bullishness intact and they might try to move towards the 50 DMA.
  • Price is not able to sustain above 38.2% Fib level and the weekly chart shows price rejection from 20 Week moving average.
  • So from the above scenarios we are in a kind of neutral area from were we can move both ways. 
  • Playing long will be easy on a daily close above 5600.
  • Try to stay short below 20 DMA But be cautious with shorts as global markets have sold off and are in oversold territory. So for bears the weakness and the bad fundamental news of global markets should continue.
  • GE Week is approaching its trend line.
  • Daily chart shows support at 18.6 level which coincides with the Fib retrace level of 38.2% level shown in weekly chart.
  • So if the above mentioned level is held then stock may move towards the resistance line drawn in last chart.
  • If 18.6 levels is broken then price will move towards its 50 week moving average and the trend lien which may act as support.
  • FORD MOTOR CO TREND LINE BREAK
  • BEARISH ENGULFING OF IWM

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"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis."
—Jesse Livermore