SPY seems to be forming a symmetrical triangle pattern, consolidating the price losses after the collapse. Though it could break at either trendline, it is an inherently bearish price pattern, and the accompainying volume suggests more downside is likely. There is heavy volume distribution and light volume accumulation within the pattern, so any breakout should be met with suspicion and any breakdown should be met with anticipation.
In a complete twist from what was previously the case, the market seems to be moving with the price of oil right now, as increases in crude correspond to increased demand, which is a bullish signal. Oil has not shown any sign of a bottom yet, though it has seen some more bullish price action as of late. How oil moves and how oil stocks responds is vital to determining the overall market's direction. Look for how USO reacts in the next days and weeks.
Stocks like Massey Energy (MEE) and Peabody Energy (BTU) are good long candidates if oil prices can turn up and take the overall markets with it. If a coutnrend bear rally is in place here, energy stocks should provide some relative strength, as they are harshly oversold and tend to be big movers. Alternative energy stocks, like First Solar (FSLR) and Energy Conversion Devices (ENER) are also strong picks, as are commodity-based stocks like Mosaic (MOS) and US Steel Corporation (X). If oil prices turn down further and the market makes a lower low, these same stocks will be excellent short sale candidates.
Bidu (BIDU) has earnings coming up in a few weeks and is currently consolidating in a large descending triangle, setting itself up for a big move one way or another. The price and volume suggest a breakdown below support is coming, but earnings will tell which way it decides to move.
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