Stock Technical Analysis: Wk of 10/12/09

Market made quite a comeback this past week, similar to what we saw in early September.  This is why “one distribution week doesn’t make any trend”.  It bounced off nicely from the 50 day MA near the support and is looking to test the previous highs.  Many I follow say this week will tell the tale.  Bulls vs Bears.  Let’s see where the market takes us, because I’m certainly not certain.

Financial Select Sector SPDR  (XLF)

XLF Financial Select Sector SPDR came back strong similar to rest of the market last week, bouncing off near the 50 day MA and the support level.  However, the MACD divergence is still there and I still cannot be bullish on the financials.  Again this week should tell whether this bull rally will continue further or pull back is still in effect.

SPDR S&P 500 (SPY)

Same story here.  Despite the big distribution week the week prior, S&P500 and SPY bounced off from the 50 day MA last week and now testing the previous support.  Deja Vu?  You bet.  We’ve all seen this similar pattern in September, and many predict the same story will be told once again.  This bull trend is strong.

United States Natural Gas Fund (UNG) requested by Linda Li

United States Natural Gas Fund (UNG) has been consolidating for the last three weeks trying to break through the resistance at $12.   This consolidation is lasting for a quite some time, and as I have mentioned before I wouldn’t want to get into natural gas at this point with lots of uncertainty.

United States Oil Fund LP (USO)

United States Oil Fund LP (USO) and oil in general has been getting a lot of attention from the technical side as it broke through the triangle pattern.  What’s interesting is that many were screaming “Short!” when the big sell-off took place and ended up getting shaken out by the big rally that followed shortly thereafter.  It is now facing some resistance again at the 50 day MA, and it has been in the consolidation mode for the past week.  Not too much certainty from the technical stand point.

SPDR Gold Trust (GLD) requested by Dorothy Wilcox

SPDR Gold Trust (GLD) broke through the symmetrical triangle pattern and has rallied since.  However, GLD continued to struggle at the next big resistance of $99 for quite some time.  Then the big week came last week.  GLD broke the resistance with a big bang making an open gap Tuesday.  So now the GLD is looking more likely to push further forward.  However, be very careful of Tuesday’s gap open.  As you may have heard already, gaps tend to be filled in the future days.  Some go as far as saying “gaps always get filled”.  I don’t necessary agree but gaps always concern me.  Bottom line,  buying long here would be hesitant for me given the gap, but the $99 resistance will certainly act as a support should the Gold decide to retreat in the coming weeks.  Good news for longs on GLD.

Research in Motion Limited (RIMM) Requested by Jeff Wold

As mentioned last week that Research in Motion Limited (RIMM) may see a bounce from the support level around $63, RIMM bounced back last week near the support level.  However, I don’t foresee RIMM recovering what it has lost already very quickly, even if it does.  If someone has fundamental reasons to get into RIMM or believe in its business/financial viability, great.  I personally would expect RIMM to trade in a range in the next few weeks.

Diamond Trust, Series 1 (DIA) Requested by Johnny

Diamond Trust, Series 1 (DIA) that tracks the Dow Jones Industrial Average has the same o’ story.  Big distribution, followed by just as big recovery.  Again, September all over again.  DIA also is facing the previous resistance level, so this week should tell whether the market will continue its rally, or if the pull back is still in effect.