Tuesday, October 20, 2009 at 09:26AM | Asher Pinto
The rising channel on the hourly chart of the S&P-500 still lives and, as such, the chart continues to be our current 'Chart In Focus.'
Rising Channel and Gaps on S&P-500 Hourly Chart
The stock was able to bounce (on Friday) off the lower end of the channel, once again. After, a 10-pt climb on Monday, the target (1100) from the inverted Head & Shoulders pattern that had formed on the intraday charts in early-Oct has been met, and prices sit near the middle of the channel. The upper line resides at around 1008 and the lower line at around 1092. The gaps that had formed during the course of the most recent climb remain unfilled - and, as such, a problem for the bulls - of course. But until the lower line is actually broken, there is no scope of their actually being filled.
That aside, the small negative divergence on MACD has morphed into a larger negative divergence. The potential sell signal has not completed itself of course and a break of the intervening trough will be needed before a sell signal is actually generated. [Read more about negative divergences in the article titled "What is the Relative Strength Index (RSI) Technical Indicator?" (Negative divergences generally work the same regardless of particular momentum indicator)].
RSI for its part is not showing any particularly interesting developments, aside from the indicator's reading's being near the overbought line (once again, not a problem given the underlying trend in the market).
« Rising Channel on S&P-500 Hourly Chart (Update 4) »
The rising channel on the hourly chart of the S&P-500 still lives and, as such, the chart continues to be our current 'Chart In Focus.'
The stock was able to bounce (on Friday) off the lower end of the channel, once again. After, a 10-pt climb on Monday, the target (1100) from the inverted Head & Shoulders pattern that had formed on the intraday charts in early-Oct has been met, and prices sit near the middle of the channel. The upper line resides at around 1008 and the lower line at around 1092. The gaps that had formed during the course of the most recent climb remain unfilled - and, as such, a problem for the bulls - of course. But until the lower line is actually broken, there is no scope of their actually being filled.
That aside, the small negative divergence on MACD has morphed into a larger negative divergence. The potential sell signal has not completed itself of course and a break of the intervening trough will be needed before a sell signal is actually generated. [Read more about negative divergences in the article titled "What is the Relative Strength Index (RSI) Technical Indicator?" (Negative divergences generally work the same regardless of particular momentum indicator)].
RSI for its part is not showing any particularly interesting developments, aside from the indicator's reading's being near the overbought line (once again, not a problem given the underlying trend in the market).
All eye on the lower channel line.