Sunday, May 3, 2020

US market TA comment: Sell on May?

DJIA

DJIA started the week with a powerful green bar and break the resistant of 50% Fibonacci retracement. However, the uptrend made a top on Wednesday and started to retrace and close below the support on 24000 as well as the 50% FB retracement support (23859). As we can see from the chart, the monthly resistant of 24805 is very strong.

Based on historical data, the saying of Sell on May is kinda valid. As a result, it would be good to side-line and monitor how low it can go. It is also important to monitor if DJIA can sustain above the supporting of 23000 and 22524.

Supporting level:  1. 23380            2. 23000              3. 22524
Resistant level:      1. 23859           2. 24000              3. 24805

DJIA weekly chart shown that the resistant of 23859 is very strong, where it had challenge the resistant again but failed to stay above it for the 2nd time.

On the other hand, the weekly candle for this week has a long upper tail which looks like a shooting star. It is a sign of toppish which indicate strong selling pressure on top.

It is important for us to monitor whether the index will break all the support and challenge previous low or it will form a higher low. 

The monthly chart for DJIA shows that April had a big rebound (+14%) and formed a bullish counter attack formation which is quite bullish. Eventhough it’s a bullish formation, we can also notice that it had hit the resistant of 24805 and started to retraced.

Even its quite bullish but the 1st trading day of May had a 3% retracement which form a small red bar which is still an inside bar for April’s bar.

Looking at the chart, we can see that the bar on March is a “Twin fractal bar”. This bar is quite an important candle, as the top and bottom of the candle will be the landmark that differentiate the bull and the bear.

This mean that if DJI able to break the resistant of 27121 and stay above it then the index is back to the bull stage and this 27121 will be a very strong support. If the Index unable to sustain above 18200 and close below it, that’s mean the index might head south further. 18200 will be a very strong resistant.


S&P 500
S&P500 started the week with a gap up and break the break the monthly resistant and challenge the cluster of 2944 and resistant on 61.8% Fibo retracement (2933) on Wednesday, however, it failed to stay above these resistant and fall back on Thursday follow by a gap down on Friday. The gap down red bar on Friday had cancel off the gap up bullish effect of Monday bar.

The index rebounded after it hit the supporting on 2820 and close slightly higher, I believe the index will soon challenge this supporting again. It is important to see if S&P 500 manage to stay above the supporting on 2822 follow by 2792.

Supporting level: 1. 2820               2. 2792                 3. 2750

Resistant level:    1. 2888               2. 2933                 3. 2946

Looking at the weekly chart, it had formed a candle with small candle body but long upper line which is a shooting star candle pattern which indicate toppish. It is important to monitor whether will it break through all the supporting to form a higher low or will break the low of 2192. 

Looking at the monthly candle chart, the candle on April is impressive. However the candle on March is much important as it is an important benchmark to tell if we are out of the woods, or not. If it could break the resistant on 3135, meaning we will be out of the woods while breaking 2192 means, it is going to be doom. 

Nasdaq

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