Wednesday, August 28, 2013

Is it a Shooting Star already ?

A fantastic pull back yesterday from 4.40, gave the market the impetus to go even higher, eventually breaking 4.50 and having a great closing in mid 4.50s, following some last minute buying and short covering. This morning, certain Stop Loss orders kicked prices up to 4.72 - up to the level of 200 MA (Moving Average), where it cooled down and pretty much immediately reversed to mid and low 4.60s - where it found the support for now.

However, looking at the large picture (larger time frame, here is Daily), we see a "Shooting Star" or an "Inverted Hammer" patterns that may (but does not have to) mark the end of the bullish trend (in short or long term) and the start of a correction / bearish trend.

It is only a mid-day here (at the time or writing), and may be too early to judge, but if you consider going long, perhaps this is not the best moment (please compare a "Hanging Man" pattern 15 candles earlier and the market reaction afterwards) to do so for speculative reasons. If you are already long, closing here for Profit Taking or tightening your Stop Loss could be a better idea.

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