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Stock Market Trend Potentially Changing To Bullish - View Best Stock Picks For Profitable Investing
By Geoff Green | April 16, 2008
Today’s action in the stock market could possibly change our trend analysis from bearish to bullish - and our market timing indicators may be telling us to select long positions from our best stock pick list that was updated today.
Spurred on by positive news from Intel (INTC), JP Morgan (JPM) and Wells Fargo (WFC), today’s surge in stock prices was definitely impressive, but lacking in volume. However, stock trading volume has been below average in recent weeks so for now, price action can stand alone depending on what happens in tomorrows stock trading.
Although not shown in this post, the weekly stock market trend has been strengthening as expected and as discussed in last Fridays market summary. This weeks daily price action has ridden on top of that longer term upwards trend strengthening.
Lets take a look at the daily chart for some clarity:
As you can see below, stock prices trended upwards all day and closed at their high for the day which is a positive indicator of future stock price action - at least in the short term.
Stock prices closed at 13,786 as measured by the Wilshire 5000 index. One reason I prefer the Wilshire 5000 index is because it provides the broadest measure of price action in the stock market for any given period of time. Instead of being dominated by just 30 stocks such as the Dow Industrial Average, the Wilshire 5000 stock market index provides a much clearer picture of what “most” stock prices are doing.
Stock prices have closed above the 50 day moving average for most of Aprils trading days, a positive sign. However, there is much overhead resistance to overcome in order to sustain an ongoing upwards trend.
I have drawn the overhead resistance level across the top of the stock market highs that have been established since mid-February. If tomorrows price action continues above this level on Thursdays trading I will be inclined to enter into long positions selected from the best stock pick list found in the subscribers area.
Other positive signals on this chart is the RSI attempting to rise significantly above the 50% level. The RSI is certainly in an upwards trend as you can see by the higher lows that this indicator has made since the low of early March.
The ADX indicator, although not yet forecasting a trending market is certainly showing that upwards momentum is stronger than downward momentum - at least for the short to intermediate term trading period.
The Stochastics has reversed to show the start of a new upward trend and the signal line has already crossed the trigger line.
The MACD histogram is certainly getting stronger and if it moves into positive territory after a brief and shallow dip into negative numbers it would forecast an increasing upwards trend momentum.
Using the above indicators as part of a market timing analysis, it would appear that entering into long positions would be a profitable investing approach - if the market continues upwards tomorrow.
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Written by Geoff Green, at http://www.profitable-investing.com Copyright 2008.
Topics: Daily Commentary, MACD, bullish, indicators, relative strength, stock market strategy, technical analysis, trend analysis |
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