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Is There Enough Momentum to Help Stock Prices Move Through Overhead Resistance?

By Geoff Green | February 27, 2008

Stock prices took a break from the recent 3 day rally to deal with overhead resistance found at the 50 day moving average and the lows created in early January.

The question of the day is if there is sufficient momentum to break through this resistance area and continue moving up?

The reality of today’s trading is that prices held up fairly well in light of bad news regarding the housing industry and a sizable drop in January Durable Goods Orders - they certainly go hand-in-hand.

Dr. Bernanke’s testimony to Congress did not seem to affect the market one way or the other.

Looking at today’s stock trading pattern you can clearly see a “Doji” was formed at the overhead resistance area.  A Doji is a classic pattern showing indecision in the stock market. 

Doji’s form when the opening and the closing prices are virtually equal.  Taken alone Doji’s are neutral patterns, any bullish or bearish significance are based on the preceding price action.  In most cases, confirmation is necessary to draw any real conclusions.

So what do you think?  Is there sufficient momentum to keep this rally going or are prices destined to fall back into the longer term bearish action that started at the end of 2007?

Wilshire 5000 Daily Chart

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Written by Geoff Green, at http://www.profitable-investing.com  Copyright 2008.
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Topics: Daily Commentary, Federal Reserve, bearish, stock market recommendations, support levels, trend analysis |

One Response to “Is There Enough Momentum to Help Stock Prices Move Through Overhead Resistance?”

  1. Tom Says:
    February 28th, 2008 at 12:02 am

    I’m not certain where prices are heading but do you think they will move back into the triangle?

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