Resistance: 7,449 – 7,873, Support: 6,970- 6,600
• The breakdown below its triangle formation is bearish. It is in its final fifth wave downwards to complete this major downtrend. Support is seen at 6,970, 6,820 and 6,600 could be tested in the coming weeks.
• Daily indicators continue to show more downside for now. MACD dipped further into the negative territory while RSI eased towards the oversold zone. The dead cross from its weekly MACD (not shown here) suggests that any rebound may not be sustainable.
• Unless the Dow could recover above the support-turned-resistance trend line at 7,449, we see any rebound as a Dead Cat Bounce. Next resistance is at 7,873 and 7,990.
Citigroup (C US; US$1.50) – SELL
• The stock broke below its US$3.00 triangle support (now turned-resistance) recently and tumbled to a low of US$1.40 last Friday. It tried to rebound and regain the US$3.00 last week but failed. This failure suggests that there are still a lot of sellers out there.
• Indicators are still weak. Its MACD has just confirmed its dead cross while its RSI is falling into the oversold region.
• Although the stock has fallen a lot since its peak, there are still no signs of a bottom just yet. We remain bearish on the stock and avoid buying for now as it is impossible to catch the low. Allow for a bottom or at least a reversal pattern on the chart to form before jumping in. Support is seen at US$1.30, its 1990 low and its psychological support at US$1.00.
Bank of America Corp (BAC US; US$3.95) – SELL
• The stock appears to be forming a bullish wedge pattern. It rebounded from a recent low of US$2.53 to US$5.89 but could not take out its 30-day SMA. Only a breakout above US$5.86 would confirm that this downtrend has ended. Maintain sell on rebound for now with resistance at US$5.11 (gap) and US$5.65.
• In the short term, there could be a tad more downside since RSI is still below its neutral mark. However, there is a bullish divergence on its MACD which suggest that the intensity of the selling pressure is easing.
• Hence, another downside test of its recent low cannot be discounted. The immediate support is at US$3.77. Falling below that could send the stock back down towards its US$2.55 support next. Again, avoid buying for now until a bottom is formed. When it is time to rebound, there would likely be plenty of time to get in even though we may not get the lowest point of entry.
Sponsored Links
No comments:
Post a Comment