Friday's close near high of the day & Nasdaq high of the year close...is giving a "technical breakout"......
Momentum traders will run this market towards new highs in all Indices......
1200 area in S&P 500..looks like a "real possibility"
Markets will get "overbought" in this RUNUP.......
Currently RSI are as follows :
Dow 63.34
S&P 500 66.04
Nasdaq 69.72
In last four months Nasdaq RSI has runup to 75 area...then a major pullback......so traders should keep this in their trading strategy......other Indices barely touched 70 then pulled back.....
VIX also getting close to 52 week low which is 16.86..currently we are @ 17.42......YES..VIX could go below 16.86 ...but again monitor this closely for locking profits....
SO.....what is a good strategy now......
Consider locking profit.......
IF you are a long-term investor...then there is nothing to do.....stay in stronger stocks in diversified sectors.....some speculative stock may not be a bad idea........
It will be PRUDENT to REDUCE exposure once we cross 1160 in S&P 500.......
After every euphoric move......there is a long digestive process...could be until next "oversold" conditions arrive.....
Oversold conditions are defined as when RSI is between 35 to 45 area based on last 4 months RSI stat....
Locking profit when RSI in your stocks are @ 70 area is a "very safe strategy".....sometimes stocks do hit RSI 80 on momentum alone????
Here is my $ allocation/sector/RSI current/RSI high
APWR 31.26% AE/Wind Turbines 43.29 82.00
IAG 25.53% Gold Mining 57.47 72.00
PALM 22.42% Tech/Smartphone 20.79 68.00
SLW 20.79% Silver reseller 54.00 68.00
My portfolio has underperformed lately due to many losing position.....APWR,PALM has been subjected to major "bear attack"......it is NOT good to have 53% of portfolio going South..while market is going North.....so..i wait till they "turnaround"..Patience has become a strategy......
Please do analyze your portfolio based on any technical indicators you have expertise in......markets CAN go in the wrong direction very quickly.....there IS such a thing as overbought & oversold........
BLOG does NOT give buy or sell.
Saleem
7 comments:
Saleem,
Arbeter from standard and poors agrees with your view. He also stated that we're slightly overbought and may pull back slightly before resuming our uptrend. He sees a possible 1200/1250 as an intermediate top. Also sees gold and other commodities resuming their uptrend.His final statement was accumulate on weakness, market headed higher. Have a good day.
Hi Saleem,
BDI breakout!
Baltic Dry Index (BDI) +121 3242
Above trend line, moving north!
Best Regards
Hi Victor,
Thanks for sharing S&P views.....
The trouble with any targets is that traders forget about being overbought & then market drifts lower until it is @ least neutralized.....
So profit taking is NOT a bad idea factoring 14 day RSI....
Saleem
Hi Standards,
Thanks for BDI update.....
EGLE is looking good right here !!!!
Saleem
GOod Morning to all
Hope you all had a very nice weekend
DId your favorite movie make an oscar?
I sold APPLE- with j the Carmer screaming the virtues of owning APPLE it was time to sell
Holding GE, GNK, FRO and APWR, ASIA, etc--
this should be an exciting trading day as shorts head for the exits?
Best to all
Hi Madmax,
Booking profit is a good idea...
Good luck with your portfolio.
Saleem
Hi All,
Nice move in Asian stocks overnight.
European markets flat.
So far we are flat here in US.
ASIA making a move to higher ground.
Best Regards
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