Thursday, April 5, 2012

April 5th, 2012 - General Market (SPY), & More (NVDA)

Yesterday the trend line I had posted last week was finally broken (had to happen some time soon since it's an unusually steep one for the market). Stochastics are finally reversing from being overbought for ALL of 2012, and it doesn't look to be a fake out (although we've all been wrong multiple times See: Jan 30 & March 6). Levels to look out for are the 1390 area, 1377 area and 1342 area. Honestly, this looks to be a healthy correction and maybe a base forming. A 12% increase in the S&P over the first 3 months is ungodly.

Love this stock. For some reason, this stock seems to just speak to a swing trader. My ultimate buy signal on this which rarely fails is a combination of two things:

1. Stochastics are oversold.

While stochastics are oversold,

2. Holds one of its support levels and Stochastics make some sort of reversal move

What this shows me is that the downside of the trading range is finished.

Looking for proof in this trade strategy, look at the Buy Arrows (green) and sell signals (red), the trade works out all except for 2 hiccups. The first is the October sell/sell short signal, which does not have a subsequent Buy/cover short signal because the stock never became oversold. The second hiccup is the most recent buy in March which did a head fake reversal in the stochastics with a hold of the 14.70 support.

Disclosure: No positions in $NVDA or $SPY

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