TECH ANALYSIS ON THE NASDAQ by CHARTY

Uncle

Established member
671 2
JANUARY 3 2001

I thought the future on the Nasdaq could go down: but not this big.

I closed my short at 2225, which was the support level taken from the lows on 20 - 21st.

As of now, the Future is already up 27.50 points. I am not surprised.

Volatility is at its high since April.

I want to spend a few lines on volatility today. I measure it on the Bollinger indicator. Therefore strictly speaking, it is the bandwith I am concerned with.

Simply speaking, it has widened too much. Too much from a historic point of view. I would expect a narrowing of the bandwith on the Bollinger Bands, which means the Nasdaq will go up.

I am now long for 15% (!!) of the amount I normally trade. The long term remains bearish.

Stochastics are still in negative land, not surprisingly (see my last article on stochastics for further details)

MACD displays a minor positive divergence. The MACD line is higher now than it was on the 21st Dec, when the security was above last night's close.

RSI also displays this positive divergence

The lowest Bollinger band is at 2157.

Conclusion........I am short for 25% of the amount I normally trade. I am looking at possibly closing this position even today if the Nasdaq stages a decent recovery.

Altogether I think it is very difficult today to make sense of the graph. At least for myself. When the situation is not clear to me, I have learnt to be patient, and wait for better opportunities.

WHAT DO YOU THINK??????????

NOTE: Authored by Charty and re-written by me so E&OE.

John
 

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