Wednesday, June 1, 2011

Levels to watch out for

The last two days have been tough for trading, no doubt about that. But the good thing was how well simple old fashioned TA has worked during this time. The chart below shows that the market got rejected right at the resistance level from February highs. If you have a look at second chart (5 min), you will see that the market got rejected not once, but twice at this level.



That's all well and good but what lies ahead? Keep an eye on the lower trendline of the channel marked in the daily chart. If that breaks, I would be looking at 1295. I am not looking to add longs for swing trades here. But at the same time, we know how shorts have fared for over a year now. So, whatever you do, be nimble. There is a time when you can, and should, ignore overall indices and just focus on individual stocks. But now is NOT that time. Respect the important levels on S&P and the other major indices.

Take care and good luck!

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