Stock Technical Analysis: Week of 8/10/09

Nasdaq (QQQQ) is definitely starting to consolidate after forming a shooting star pattern last week.  Given it’s a bit over-extended right now, I’d expect some pull back here if it’s going to continue upward.  Overall, the trend is clearly bullish, so if you’re looking to go long here, you may want to wait for a pull back before getting back in at this level.  If you’re already long, consider taking some profit by unloading part of your portfolio position.

SPDR Financial (XLF)

Although the financials were lagging behind other indices like Nasdaq, it has been extremely strong the last few weeks.  Breaking through the previous resistance, XLF has rallied nicely and continues to look bullish now.  While it’s a bit extended, no reason to believe the bullish trend is broken unless it starts to dip below the ~$13 and ~$11 support respectively.  If you’re long here, a stop-loss near $13 should be appropriate.

S&P 500 (SPY)

S&P 500 has been facing some difficulties breaking through the ~1000 (100 SPY) resistance levels, but it got a nice boost after the employment report Friday.  Although it is now above the resistance level, it is clearly starting to consolidate looking for the next move up or down.  I can’t tell which way it’ll ultimately go, but the mid-term trend is still bullish here.  I’d be surprised if it didn’t retrace back a bit if it’s going to continue the rally, but I’ve been surprised many times in the past two years.  As an example, everyone was talking about the shooting star formation last week and were leaning bearish.  Despite the “over-bought” sentiment, SPY continued its march upwards last week.  Now 50% above the March 2009 low, I know this type of rally cannot be sustained for too much longer.  However, I’m not so sure if S&P will truly lose ground here right here right now, amid this overly optimistic market.

United States Natural Gas Fund (UNG)

UNG continues to be the choppy monster.  Still bearish long-term, it continues to fail its attempt at breaking through the bearish trendline.  It is notable, however, that UNG is forming a higher high and a higher low since the July lows.  Recently I read an article by Chris Nelder, an energy expert, on his bullish sentiment on gas.  You should definitely check it out.  If there’s one guy who knows energy, it’s Chris.