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Which part is funnymental?
-Neal.
At 01:25 PM 12/13/2000 -0500, you wrote:
Fundamental
analysis is DiNapoli??
Kevin
Report for the Financial Sector (AMEX: XLF), 12/11/00.
Summary:
Finance headed down... Probably..
Detail.
Since September XLF has been trying to cross the $30.00 level. Three
times it has failed between $29.00 and $30.00, now we have another
attempt.
How often should it try before giving up? Unless there is some
unpredictable surprise, I expect XLF will fail this time again..
But as with most trading, this is not a sure thing. The Monthly chart
shows a strong uptrend (MACD) is still in place. XLF
has supported twice in this uptrend at the .382 area (Focus = 29.75
9/15/00 Reaction = 19.50 3/10/00). Supporting at the .382 rather than
.618 is a good sign that the $30.00 resistance can be exceeded.
Why do we have so much resistance in this area? Why do I favor a
down-turn at this time?
The monthly chart shows we are in the XOP resistance area of $29.10 .
As well, the daily chart shows (see FibNodes attached) an OP at 30.125
and XOP at 32.83. The Weekly MACD is still in a solid down-trend, though
it could attempt to cross upwards in the near future. The daily chart has
just shown the first signs of resistance, after reaching the
Oscillator-Predictor overbought level.
More recently, the Daily chart shows we had a deep retracement,
finding support at the .618 area rather than the .382 area (support on
11/22/00).
So will the longer term uptrend win out over the shorter term
resistance? I think the resistance will be sufficient this time. We will
know soon, and when we do we can trade the very short term in the right
direction.. One way to benefit from this knowledge, is to watch the stock
charts which make up this sector, look for Directional indicators, or
Confluence/Agreement. This combination can provide a low-risk trade, if
it materializes.
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