Editor's note:
this column was originally published on Capital Essence's CEM News on October 03, 2007. It's being republished as a bonus for the loyal readers. For more information about subscribing to CEM News, please click here.
Good Morning. This is Capital Essence's "Market Outlook" (the technical analysis of financial markets) for Thursday October 04, 2007.
Stock finished slightly lower Wednesday, lost an average 0.5% for the day, amid some profit taking activities. Despite the overall weakness, the homebuilder continues to buck the trend, tacked on more than +3%.
General speaking, things could be a bit sloppy at current level though an advance to above the 410 level, especially a clear breakout above 440 would set the stage for an explosion higher, possibly into the 550 area.
Just so that you know, the group had gained about 15% since profiled on the "
Exclusive Stock Pick" last week.
Let's take a look at the major indices:
The Standard & Poors 500 Index (daily) chart above addresses a short-term time frame.
The board market index continues to drag sideway beneath resistant at July's peak.
As
mentioned, this doesn't look good on the bulls though the bears don't really have any cases until or unless they manage to push prices to below the September 25's low about 1507.
Short-term support is about 1525.
The Dow Jones Industrial Average (daily) chart above addresses a short-term time frame.
The blue-chip index seems to be conducting a test of support at recent bullish breakout point.
Technically speaking, this is normal.
As
mentioned, the bulls should have nothing to worry about as long as the index holds above the 13700 level.
Bottom line: a majority of indicators had registered a short-term oversold reading as of Wednesday closing. And more likely than not, the market will kick in an oversold rebound as soon as tomorrow.
Until next time, good luck
(By: Michelle Mai for Capital Essence)
Note: Michelle Mai writes technical analysis for Capital Essence and is the editor of Capital Essence's "Market Outlook" newsletter. To receive the daily edition, please
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