Sunday, March 28, 2010

Let the market leaders guide you

As you know dear readers, this rally has been blessed with strong leadership with stocks like AAPL, GS, GOOG leading the way. So, I thought it would make sense to have a look at these stocks to see if we could gain any insights to where this market is headed.

AAPL - A strong negative MACD divergence developing. I see 225 in the very near future. The gap support at 215 looks very strong though and should be further strengthened by MA(50) soon.

GS - Rejected right at strong resistance at ~179 levels. A negative MACD divergence can be seen here too. A pullback to 170 can be expected, which is the next support. Again, both MA(50) and MA(200) inching up to provide more support.

GOOG - I bet a lot of people got stopped out below the MA(50) on this one. This stock has moved a lot on news lately, due to all the China business. So, it would be wrong to conclude too much about the overall markets by looking at this one, but even in this chart, strong support can be seen at ~530 levels which will soon be strengthened by MA(200).

So, what are these market leaders telling us?
  • Negative MACD divergences developing which signal a pullback in the near future
  • All these stocks have strong support not too far away, which will be further strengthened by important moving averages converging there in the near future.
To conclude, be prepared for a pullback in the near future but expect the dip buyers to jump in at or even little above the support levels.

Take care and good luck!

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