Stocks Encounter Resistance Near 50 DMA Line


Tuesday, May 11, 2010
Market Commentary:

The major averages traded between positive and negative territory but closed mixed to slightly lower after encountering resistance near their respective 50 DMA lines. Volume totals were reported mixed; higher on the Nasdaq and lower on the NYSE compared to Monday’s totals. Advancers led decliners by more than a 21-to-17 ratio on the NYSE, and by a 16-to-11 ratio on the Nasdaq exchange.  New 52-week highs outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were 19 high-ranked companies from the Leaders List that made a new 52-week high and appeared on the BreakOuts Page, higher than the 7 issues that appeared on the prior session. Waning leadership has been evidenced by the recent lack of stocks making new highs as the rally came under pressure.

Market Closed Below Important Resistance Levels:

All the major averages opened lower, then turned higher, only to pullback after encountering resistance near their respective 50 DMA lines. Last week’s historic sell off left a lot of technical damage on the charts of the major averages and leading stocks. Until the major averages all close above their respective 50 DMA lines then by definition the technical damage will remain intact and the near term trend will be lower.

UK’s New Prime Minister- David Cameron:

In a surprising turn of events, David Cameron was named the new Prime Minister of the United Kingdom after Gordon Brown unexpectedly resigned. Cameron’s new role helped the conservative movement regain power after a 13 year hiatus. David Cameron is believed to be nearing an agreement on forming a coalition government with Nick Clegg’s Liberal Democrats. Negotiators for both their parties met on Tuesday after talks broke down between Brown’s Labour Party and the Liberal Democrats.

Market Action- In A Correction- Day 2 Of A New Rally Attempt:

Tuesday marked Day 2 of the  current rally attempt which means that as long as Monday’s lows are not breached the earliest a proper FTD could emerge will be this Thursday. However, if Monday’s lows are breached, then the day count will be reset. Taking the appropriate action on a case-by-case basis with your stocks prompts investors to raise cash when any holdings get into trouble. Trade accordingly.

Professional Money Management Services- Free Portfolio Review:
If your portfolio is greater than $250,000 and you would like a free portfolio review, 
Click Here to get connected with one of our portfolio managers. ** Serious inquires only, please.


Here are more articles you may like

Claim Your Free Guide Today

Give us your email and we will give you the tools to change your life. 


Learn about Early Entry Points & much more...

© ChartYourTrade | Contact us:

Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.

Charts and Data are courtesy of MarketSmith Incorporated. Join MarketSmith here.

Terms of Service