Wednesday, March 5th. - Stock Trends, Charts, and Commentary (***If you see last week's Wednesday Update: Click Here)
An Update on the Banking Index ...
The current Banking index chart (as of yesterday) is posted below.
From the solid blue trend line, you can see that it has been in an Up Trend since the end of 2012.
Now, we are coming to a point of concern. Note the labels we attached on the chart ... L.S. stands for Left Shoulder, Head is the head, and R.S. stands for Right Shoulder. That is the description of a Head & Shoulder pattern that has downside implications.
In such a pattern, the equity rises lower than the Head on the Right Shoulder, retreats and breaks its support. From there, a downside move typically occurs which would be about 18% from yesterday's close.
What if? What if it doesn't form a Right Shoulder? It could make a "double top" or go on to new highs.
So, this is a point of anticipation and caution as these possibilities get tested out.
Right now, a concern is the level of the CRSI which is a zero-based Relative Strength Index. It is not looking too healthy on the medium term.
shoter term hope is the Timing Indicator at the bottom of the chart which is testing the neutral line. If it keeps trending up in the next few days, it will start another up trend. So, for now ... it looks like it will be moving up and the question will be how high can it move before it gets into trouble?
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