Technical Analysis: Gap And Trap

The Dow (first chart below) ran into the upper boundary of its symmetrical triangle today. If it can clear 8000, the index may have room to run. To the downside, if it breaks below 7790, it could fall a long way. The S&P (second chart) pushed through the upper boundary of its symmetrical triangle before being rejected at 852 resistance; a move above that level would be a plus. To the downside, a break of 827 would be bearish. The Nasdaq (third chart) put in one heck of a bearish engulfing candlestick today, completely engulfing Friday’s trading range. 1353 is critical resistance, and support can be found at 1315-1317, 1300 and 1292. The SOX (fourth chart), the semiconductor index, turned down once again from the neckline of a head and shoulders top.

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