S&P Uptrend Resumes

Editor’s note: this column was originally published on Capital Essence’s CEM News. It’s being republished as a bonus for the loyal readers. For more information about subscribing to CEM News, please click here.

Good Morning. This is Capital Essence’s Market Outlook (the technical analysis of financial markets) for Tuesday May 19, 2009.

Stocks rallied Monday after a new batch of upbeat economic data encouraged investors to step back in to the market after last week’s selloff. The Dow Jones Industrial average added 235 points or 2.85% on the day. It worth noticing that trading volume was extremely light and many big buyers in Monday trading session were traders who missed or lagged the March rally. Indication is that buying enthusiasm is not as great as the point moves indicated.

Notably, shares of Bank of America (BAC) jumped 10% after the bank was upgraded to “buy” by Goldman Sachs (GS). In fact, our “US Market Trading Map” was looking at BAC from a buy side back in March 18. And if you’ve bought the stock immediate followed the buy signal, you would be sitting on 60% gain right now.

Bank of America - May 18, 2009 (Click on image to enlarge)

Chart 1.1 – Bank of America (daily).

As shown, after a nice rally, BAC pulled back to key support level that has been previous successful in repelling price action. Monday bullish trading action had helped setting the stage for a retest of January/May resistance, about 15. That, if taken out, should trigger a massive rally directly into the area of December high, about 18. Immediate support is about 10.10, or the white line on the chart.

Also contributed to the overall optimism was news that Macy’s (M) was added to the Conviction Buy List at Goldman Sachs and the better-than-expected quarterly results and upbeat earnings outlook from Lowe’s (LOW) and Dillard’s (DDS). The SPDR S&P Retail (XRT) gained 3.9% as a result.

SPDR S&P Retail - May 18, 2009 ( click on image to enlarge)

Chart 1.2 – SPDR S&P Retail (daily).

Above we’ve highlight our short-term trading range of the XRT. As indicated in the chart, the red and pink shadings represent the overbought zones. When the price moves into or below the green shading, the sector is considered oversold. As shown, the sector had moved into the oversold zone in recent days followed the early May’s pullback consolidation, which represented the digestion period in the aftermath of March’s massive rally. Once prices moved into the green zone, we finally saw an oversold rally that many investors have been waiting for. In fact, Monday’s strong bounce had helped pushing XRT back into its normal trading range. So we should expect a rally back to the top of the uptrend channel that has formed over the past couple of months. A close above 26.90 will confirm this. Immediate support is about 25.20. At this juncture, only a decline below that level will begin to wreck the near-term bullish outlook.

Strength in financial and retail stocks helped carry the S&P 500 back above the important sentiment 900 level as the broader market’s advancing issues outnumbered its decliners by 10-to-1.

S&P 500 index - May 18, 2009 (click on image to enlarge)

Chart 1.3 – S&P 500 index (daily).

We’ve pointed out in the previous Market Outlook that the S&P 500 index was sitting at a “key inflection point” that could help identify which direction the market will trade over the next couple of weeks. The action so far this week favors the bulls as the index bounced nicely off of the support offers by the uptrend channel. An upside follow-through tomorrow will confirm today bullish trading action and a retest of key resistance at the area of May high should be expected. If we can break above that level, higher prices will most likely ensue. That’s said, a sustain breakout above the May high will trigger all sorts of stops and thus a test of the important psychological 1000 level is inevitable. Immediate support is about 880. As mentioned, this is a very important support. If we get a close below it, then we could go straight down into the 830 region.

In summary: after a much needed consolidation that took some excessive bullishness off the market, stocks, as represent by the S&P 500 index, are moving higher once again. Right now sustainability is the critical question. If the market can continue rally past the May high at the 930 level on the S&P, then we could go straight up to 1000 by the end of May, or the first half of June.

Thanks and Good Trading!
(By: Michelle Mai for Capital Essence)

Note: Michelle Mai writes technical analysis for Capital Essence and is the editor of Capital Essence’s “Market Outlook” newsletter. To receive the daily edition, please subscribe. It’s now available at a monthly rate.

標普恢復上升趨勢

Editor’s note: the English version of this column was originally published on Capital Essence’s CEM News. It’s being republished as a bonus for the loyal readers. For more information about subscribing to CEM News, please click here.

這是Capital Essence對2009年5月19日(週二)的市場技術分析。

由於一系列樂觀經濟數據促使投資者在上周股市回調之後逢低買進,週一美股大幅走高。道瓊斯工業平均指數勁揚235點或2.85%。值得注意的是,昨天的成交異常清淡,週一行情中的大買家主要是那些錯過了3月漲勢或入場較晚的交易者,這說明昨天的買入興趣並不像點數所顯示的那樣強勁。

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引人注目的是,由於被高盛(GS)調升評級至“買入”,週一美國銀行(BAC)大漲10%。事實上,我們的“美國市場交易地圖”從3月18日開始看多美國銀行。如果你當時根據我們的買入信號立即買進,你現在已經獲得了60%的盈利。

Bank of America - May 18, 2009 (Click on image to enlarge)
Bank of America - May 18, 2009 (Click on image to enlarge)

圖1.1 美國銀行(日線圖)

如上圖所示,美銀股價回撤至一個關鍵支撐位,這一位置曾多次擊退下跌攻勢。週一的行情為重新測試1月和5月高點的阻力打下了基礎,大約在15美元。如果突破這一位置,將觸發迅猛攻勢,劍指12月高點區域,大約18美元。緊鄰支撐位大約在10.10美元(上圖白線所示)。

昨天的利好消息還有Macy’s(M)被高盛加入“強烈推薦”名單,以及Lowe’s(LOW)和Dillard’s(DDS)公佈好於預期的財報並發佈樂觀財測。結果SPDR S&P Retail(XRT)大漲3.9%。

SPDR S&P Retail - May 18, 2009 ( click on image to enlarge)
SPDR S&P Retail - May 18, 2009 ( click on image to enlarge)

圖1.2 SPDR S&P Retail(日線圖)

上面我們著重標出了XRT的短期交易區間。在上圖中,紅色和粉紅色帶代表超買區域。當價格進入或跌破綠色色帶,板塊便被認為已經超賣。從上圖我們可以看到,零售板塊在5月初進入回調整理走勢以來,最近幾天跌入了超賣區域。一旦價格進入綠色區域,我們終於迎來了眾多投資者期待已久的超賣反彈。事實上,週一的強勁反彈已經讓XRT返回了正常交易區間,因此我們預計它將繼續反彈至過去幾個月來形成的上升通道的頂部。如果收盤站上26.90美元,將確認這一走勢。緊鄰支撐位大約在25.20美元,在目前關頭,只有跌破這一位置才能開始逆轉近期看漲的態勢。

金融股和零售股的強勢使得標普500指數返回了900點重要心理關口上方,標普500成份股中上漲家數與下跌家數之比為10比1。

S&P 500 index - May 18, 2009 (click on image to enlarge)
S&P 500 index - May 18, 2009 (click on image to enlarge)

圖1.3 標普500指數(日線圖)

我們在昨天的市場前瞻中指出標普500指數處於一個“關鍵拐點”,未來數周市場的方向將由此確立。到目前為止走勢利於多頭,因為指數從上升通道的支撐處獲得良好反彈。如果今天繼續上漲,將確認昨天的漲勢並有望重新測試5月高點區域的關鍵阻力。如果指數能夠突破這一高點,上升空間將被拓寬。換句話說,如果有效突破5月高點,將觸發各種止損,測試1000點重要心理關口在所難免。緊鄰支撐位大約在880點。正如我們提到的,這是一個非常重要的支撐,如果標普收盤跌破這一位置,將直接回到830點附近。

總結:標普500指數在稍微回調之後再次上攻。目前漲勢能否持續是關鍵問題。如果市場能夠突破5月高點(標普930點),那麼股市有可能在5月底或6月上旬直接上攻至標普的1000點。

(本文作者:Michelle Mai)

﹕Michelle Mai為Capital Essence(錢途集團)撰寫技術分析﹐並為包括市場趨勢在內的數份金融市場投資通訊的首席市場策略師。如欲每日盤前收到更多最新分析, 敬請訂閱