Editor's note:
this column was originally published on Capital Essence's CEM News on October 16, 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 Wednesday October 17, 2007.
As we've said in the
previous Market Outlook: "
oil is well position to test the $90 level" – crude oil topped $88 per barrel at their highs for the day before closing at $87.61, up +1.7%.
This was one of the many factors that sent stocks lower for a second day in row.
Despite the overall weakness, shares of Vanda Pharmaceuticals Inc (
VNDA) jumped more than +7% today on the heel of last week +20% gains.
VNDA has returned more than +30% since profiled on our Oct. 09 "
Swing Trader Bulletin" as a potential buy candidate.
Though admittedly extended at current level, we expect the stock to draw buyers on a pullback to support at recent bullish breakout point, around $15.
Short-term support is about $17.
Resistant is about $20.50.
Let's take a look at the major indices:
The S&P 500 Index (daily) chart above addresses a short-term time frame. The board market index had pulled back to the area that precedes a short-term technical rebound in the past couple of months. Although bear in mind that a failure to attract buyers at current suggests a test of an important support around the 1520 level. Short-term resistant is about 1540.
The Dow Jones Industrial Average (daily) chart above addresses a short-term time frame. Similar to the S&P 500, the blue-chips had also pulled back to support at the area of the 20-day moving average. It worth notice that this is also where the two-month rising trendline lies. If history is any guidance, then the index should throw in a meaningful rebound sooner rather than later. Short-term resistant is about 14000-14100.
Bottom line: Tuesday trading action: "shallow declines with prices find support around the area of moving average", indicates a bullish bias for Wednesday trading session.
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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