Wednesday, April 29, 2009

New BGZ Trade

While the short-term model is not in the overbought region currently, it is working its way back there, and now that the market has made a new high, the model is showing a bearish divergence with the last overbought signal.

The hourly chart and 90 min chart are showing nice reversal candlesticks on the 2:00/2:30-3:30 ET time frame. Also the 60 min stochastics is just turning up to overbought territory. The tendency has been so consistent for FOMC day gains to be largely or completely given back over the next 1 to 3 days, that I don't see any reason not to enter a bearish trade here.

New Trade Recommendation

Buy BGZ ASAP with a market order. The current price is 44.90 which I will use for the blog entry price.


1 comment:

  1. Another interesting and potentially bearish fact is that XLF is about 6% from its high for the rally while the broad indexes are making new highs. That has been a consistent divergence that has shown up at intermediate tops in this bear market.

    Intraday cumulative TICK levels on the NYSE are back in clearly overbought area. The market has been repsponsive to these TICK levels on both the up and downside extremes for several weeks.