Stock Technical Analysis: Wk of 10/5/09

With big distribution week, Nasdaq QQQQ now broke through the rising wedge.  It even broke through the resistance around $41 and the volume was pretty good.  This is now looking like an opportunity for me.  For those of you patiently waiting for the right timing, this may be your opportunity as well.  One distribution week doesn’t make any trend, but it could certainly be the beginning.  People are certainly paying attention to the big sell off last week.  I wouldn’t be surprised if QQQQ consolidated for a bit, but the possibility of further decline is now greater.

Financial Select Sector SPDR  (XLF)

For the same reasons mentioned before, I have not been too bullish on the financials right now.  Broke through the support level and the risk to the downside is now great than it was before.

SPDR S&P 500 (SPY)

S&P 500 broke through the trendline similar to the other indices.  It’s sitting at the 50 day MA and nearing the next support around $101.  If you’re a bull here, be cautious going into Q4 as the quarter-end window dressing is now over, and we could see what the “true market” will do in the next few weeks.  Now, if you’re eying the short side, you need to be cognizant of all the support levels out there.  Even if the market’s going to decline, it won’t be an easy ride down.  After all, the overall trend is still bullish.

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.  As I mentioned last week, I would not want to get into natural gas here if I’m depending on the technicals to suggest an entry point.  I would really want to see the price break through $12 and sustain it.

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 could resume it’s decline again.  I can’t say with assertion, but I say the risk is greater on the downside now than upside for Oil.

SPDR Gold Trust (GLD) requested by Dorothy Wilcox

SPDR Gold Trust (GLD) broke through the symmetrical triangle pattern and has rallied since.  However, GLD continues to struggle at the next big resistance of $99.  If Gold can really break through this big resistance, it would likely resume it’s rally beyond $100.   If you don’t own GLD and are thinking about it, it’s probably worth the wait to see its next move.

Research in Motion Limited (RIMM) Requested by Dan Hearn

I still don’t have anything positive to say about Research in Motion Limited (RIMM) after the massive sell-off.  I personally don’t have a good assumption on where RIMM goes in the next few weeks, but I wouldn’t be surprised if it consolidated in a range for the next few weeks.  Bottom line, the damage has already been done, so RIMM won’t recover quickly unless positive news saves the sentiment.  Short-term, we may see some bounce from the support level around $63.