Friday, October 29, 2010

S&P500: Trendline Watch

While the SPX is rangebound in the doldrums, here's the 15-year SPX chart once again. Good news for the bulls: the current consolidation is occuring just after a break above the downtrendline joining the Oct07-May10 tops. Good news for the bears: The decade old parallel channel line resistance(red line) is just above around 1210, followed by 1220 horizontal resistance.

With the weekly RSI overbought & dollar finding support as well, it would probably be prudent for bulls to take profits at this point, and wait for a positive break above 1220, before initiating fresh positions.

All the best!
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