Sense & Guts - Technical Analysis: Dow Jones Index seeing some Resistance

What is Technical Analysis?

Technical Analysis is the forecasting of possible future price movements based on the past or historical records. Like other forecasting methods, it is using the past to determine the possible future, although the result may not be 100% accurate but it helps investors to anticipate what is the possible price movements ahead.

Technical Analysis is used by many investors and fund managers. It helps them to determine the trend of the market and individual stock, as well as the timing for entry and exit in their investment.

Friday, July 25, 2008

Dow Jones Index seeing some Resistance

Dow Jones index closed at 11632 after hitting high of 11820. With the candle showing a doji, looks like some bears start to come out again and some bulls are taking their profit as well. We can see from the daily chart, currently there is a resistance at 11829 (50d EMA) which coincide with the 200w EMA in weekly chart.

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For indicators, MACD shows sign of of crossing the centerline soon, but base on my another fast leading indicators, it is actually at oversold region and it is showing sign of moving down. With the resistance at 11829, DJI is likely to come down for the next few days. For a continue short term uptrend, we need to have a higher low formed.

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