Indices are showing rare strength in climbing over 200 DMA, only sector that has not gone over 200 DMA is Russell 2000.
To further analyze, let us check RSI :
RUT 74.58
DOW 69.43
S&P 500 69.01
SOX 67.84
Nasdaq 66.62
Based on all of the above RSI numbers, history tells us we are overbought and is near top of the range for RSI.
Russell 2000 is way above overbought, DOW, S&P 500 are near 70 area.
Nasdaq is the only one which has some room to hit 70 area.
As you can see from RUT, it is above critical 70 area.
SO...how do we interpret these overbought RSI numbers, we may have to go back to election of Donald Trump when we were touching 80 area.
YES...it is possible to go above current RSI readings.
IF we go above these numbers then we are entering "severely overbought "
CAUTION is advisable IF we are hitting 80 RSI area.....
Pullbacks from 80 area is " sharp & sudden "
As they say " Bulls make money Bears make money pigs get slaughtered "
Greed may not be good as we get close to 80 area
All Indices are hitting top of its range, they may go over top of the range, but drop can be very painful.....
Please exercise extreme caution this short week.
Good luck with your own research about this TAPE and comfort level.
BLOG does NOT give buy or sell.
Saleem
4 comments:
Hi Saleem,
Last week: +4.03% (YTD: +6.36%)
Notable Winners: UXIN TWST HEAR ORTX TENB URI VICR
Notable Losers: GRTS NIU
I finally had an outperforming week as some of my laggards perked up and the portfolio showed broad strength. I think we remain in a bull market scenario and expect rotating strong stocks daily which should grind the averages higher. My only regret is not keeping TNA as, as I expected, it continued to be one of the best investments since most stocks are moving gradually higher. I will likely remain a stock picker from here though, trying to find the rotating breakouts.
Holdings: ORTX URI HEAR MLNX TWTR SAIL AA EAF TWST VICR UXIN HUBS NIU TRIL, cash 0.0%
I think commodity stocks represent some of the best value in the market right now as they remain significantly off their 6 month highs, yet underlying prices and world economies appear to be ticking higher. I'm not sure they will necessarily move because investors don't seem convinced, but if they do start moving, I think the move could be sharp. It's something I'm watching closely.
Stocktrader
Hi Stocktrader,
last week UP 3.42%
YTD UP 81.77%
Saleem
Hi Saleem,
Oops, just realized I reversed my first line:
Last week: +6.36% (YTD: +4.03%)
Congrats on your record-breaking 1.5 months!
Stocktrader
Hi Stocktrader,
Thanks for your appreciative note.
Saleem
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