Tuesday, April 20, 2010

Quiz on Technicals

Dovetailing with Monday's Shanghai chart in the newsletter, check out the Hong Kong ETF. Are you a buyer or seller and why?

I cannot dispense actual trading advice right here but let's list the evidence:
  1. Resistance breakout failure
  2. Divergence in On-balance volume
  3. Broken trend line
  4. Downside breakaway gap
Look at RSI (divergence), relative performance (lagging) and MACD (crossover), too.
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2 comments:

  1. forex-catApril 20, 2010 at 5:46 PM

    Your blog is very interesting.
    Thank you.

    ...my blog:
    forex chart analysis and a cat

    ReplyDelete
  2. patrick neidApril 21, 2010 at 7:00 AM

    A seller--even though I think the markets world wide still want to go higher!?

    I like the trade for all the reasons you state in addition it comes with a clearly defined risk, a stop over the old highs. Just as importantly the US markets are very close to printing .618 retracements across the board. Generally speaking a consolidation should take place around this level further allowing Hong Kong to work to the downside.

    This is also taking place within the confines of a possible massive top forming since last July. However massive tops that fail are simply consolidations for major moves to the upside. Either way I think the risk reward is certainly worth the trade.

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