December 3, 2011

  • Price is reacting negatively from 200 SMA and the resistance line.
  • For Bulls price has to stay above 200 SMA for continuing the current up move.
  • MACD is looking good for some more up side But price has to support bulls by breaking above the resistance line and 200 SMA.
  • This entire up move is a corrective one for the fall from 134 levels and this up move is not supported by an increase in volume as shown in the last chart. Hope for bulls is a breakout above 200 SMA along with volume spike. If that does not happen bears will be in control soon.
  • Price has closed above 50 Day SMA. MACD is showing a good buy signal.
  • For bulls price is approaching a cluster of resistance in the form of Week High EMA, 20 Week SMA and the Golden ratio which might succeed in slowing down price momentum.
  • If 50 SMA continue to hold we may see price breaking the resistance levels mentioned above.
  • Bears would be hoping that price gets resisted near golden ratio and close below 50 Day SMA. 
  • So in short if bulls are able to face the approaching resistance levels and protect 50 SMA then this rally will gain further momentum on the upside.

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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