Stock Market Chart Analysis: 08/18/11

August 18, 2011

QQQ Hour chart is favoring bears after the gap down below 50 Hour moving average.
If day low 50.72 gets tested again then we may see another Dip in favor of bears.
Bulls may try to fade the GAP but they have the difficult job of breaking above the cloud.
CRUDE OIL NEGATIVE DIVERGENCE
AAPL TREND UPDATE

AAPL 5 Minutes chart shows the GAP down from a small triangle pattern.
Hour has fallen below 50 Hour moving average.
Daily is still above 50 Day moving average.
If today's GAP is not closed soon then price may fall towards 50 Day Moving Average.
GOOG TESTING 50 DMA

Gold hour chart is moving up in a channel.
If the channel holds price will continue to make newer highs.
Price is also trending up above 50 Hour moving average. Holding this moving average bulls will continue to move higher.

Nifty is approaching apex of a pattern in daily time frame.
According to this pattern price should find support near 4880 - 4900 levels.
Price not breaching 4900 will be good for bulls for a reversal.
Price trading below 4880 - 4900 levels would weaken the possibility of a reversal.
RCOM NEAR CHANNEL BOTTOM

RCOM daily has hit a support line.
One has to be careful of going long because there is not reversal candlestick pattern in daily or weekly charts.
So one can try to trade Rcom from daily charts. Try to stay long above the Blue dotted resistance line.
Breaking 74 makes the support and above bullish view invalid.

CHART-II

Negative divergence gave a good short trade in crude oil as discussed in the below chart.

CHART-I

Nifty is moving towards the recent low made at 4946.
Price if finds support there then we may see a descending triangle pattern.
It has been trending in favor of bears from 5600 levels.
Price has not made a close above 50 Hour moving average yet.
So warnings of a trend change might come if price starts to trade and close above 50 Hour moving average until then stay short.

Bank nifty is trading closer to its previous resistance in weekly chart which may give support for this index. But problem here is the weekly chart or the daily chart is not showing any signs of reversal sight.
Price continues to trade below 5 day low ema. Candlestick patterns too are bearish at the moment.
Weekly chart shows a bearish triangle breakdown. Targets for this one is much lower if it plays out according to the rules.
So wait for a daily Bullish reversal candlestick or close above 5 day high ema signs to confirm a reversal to go long.
Those who are short should have trailing stop loss because of the oversold reading in daily chart.

Price is trying to stay above 200 week moving average.
Important Fibonacci levels which got broken is acting as resistance.
Hour chart is favoring bulls. So if price holds above 50 Hour moving average then it may move towards 200 Hour moving average.
Bears need to break 50 Hour moving average on closing basis which may trigger a correction.
IT WAS A DAY OF FALSE BREAKOUT'S (CRUDE, SILVER, ES, SPY)

QQQ Hour is hanging on to 50 Hour moving average.
Price closing the hour or day below 50 Hour moving average may give another correction towards the recent lows.
Four hour chart shows price near the previous support which was broken. Now price has rallied towards the previous support which is acting as resistance.
So bulls need to sustain above 53.62 levels otherwise bulls face the risk of another correction.
But for now if price stays above 50 hour moving average bulls are safe.
IT'S A DAY OF FALSE BREAKOUTS - ES, SPY, SILVER AND CRUDE OIL