DJIA Outlook for Dec. 1 – 5, 2008
Sunday, November 30, 2008 21:00
Recapping the highlights of the previous week:
- The U.S. government bails out Citigroup (NYSE: C). Another bailout ? What about those automakers?
- Sirius XM radio (Nasdaq: SIRI) subscribers wish they had an iPhone application. Them too? Steve Jobs can’t save GM and SIRI at the same time.
- Twitter makes an about face from Facebook. What’s the next kind of hot site that kids will think of next? Whatever it is, I’d like to head them off at the pass.
Somehow, some way, the fall of DJIA has stopped, at least for the moment. I would even go as far as saying that the index has gone sideways since the lowest point in early October.
What is noticeable in the current scenario though, is that we are getting a bullish divergence from the MACD. If you take a look at the lows of DJIA, and compared them to the same timeframe as the MACD, you would see that the index has made lower lows, yet the MACD has made higher lows. This is an early warning device that we use to give us an indication of an impending change in the trend.
This could be the first good sign that we will see. It may be too early to call also but since the index is on a sideways trend right now, it’s very possible that it’s creating a pattern. We’ll only know what kind when things become clearer.
It could be time to look for those stocks with potential to rise even for the short term.
Recommendation: Buy selectively
Resistance: 9370
Leave a Reply
You must be logged in to post a comment.
