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Monday, April 19, 2010

Market Volatiliy Return

Dow dropped 125 points on Friday. Usually, triple digit move like this does not come in isolation. Over the next 2 ~ 3 weeks, we may expect more triple digit up and down move. Volatility translates into trading opportunity as well as risk. Nimble action is advisable!

Locally, STI closed above the 20 SMA and a resistance turned support line. Swing trading setup suggest a possible technical rebound after three days of drawdowns ( period of successive losses is called drawndowns ). However, STI always take cue from Dow so it is hard to conclude whether the setup will be invalidated by Dow overnight performance. Immediate support and resistance are 2,880 & 2,997 ( or simply 3,000 - gap resistance ).

Should there be a technical rebound, the counters below show pretty nice setup:

Dow Chart :
Key support at thick blue line ( 10,770 )

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