Tuesday, September 7, 2010

No need to panic.....yet

Let's get one thing straight right at the very beginning - Today's pullback was constructive for the bulls. No market can go in one direction forever and we have had quite a run up since the beginning of last week. Until and unless some important levels are breached, any consolidation/pullback should be taken as positive. What are these important levels? Let's have a look.

S&P - Low volume pullback today. 1082-1080 are the support levels and until and unless these levels are breached, I will continue to have a bullish bias. Why 1080 and 1082? 1080 because it is the close of the day this rally started and 1082 because its MA(50).

NASDAQ - In yesterday's post, I had written that I would like a pullback to MA(50) and that's exactly what happened today. As you can see, no damage done to the charts today.

RUSSEL 2000 - Similar to the Nasdaq, there was a pullback to MA(50).

To wrap things up, MA(50) is the level to watch out for in both Nasdaq and Russel 2000. Keep your watchlists ready in case we bounce from these levels.

Take care and good luck!

P.S.: I got out of EGO that I had taken on Friday at 19.40 for 2.97% gain.

P.P.S.: Click here for today's Chart of the Day.

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