Charts afford us the luxury of telescopic vision. All we have to do is look at weekly, daily and hourly charts to see how things are going from the distance, closer up, and microscopically.Today continued the upward trend in the short term. Looking at the indicators on the hourly chart, the MACD Histogram is showing a negative divergence. The MACD is close to falling below its signal line. The Slow Stochastic is heading down - negative.
On the daily chart, the MACD has crossed above the Zero line. That's an important development in the medium term. The RSI is well below an overbought level. But the Slow Stochastic is showing overbought. Some softening in the short term seems probable.
On the Weekly Chart, matters are still trending sideways, but the last candle looks very positive. Otherwise, indicators are non-trending.
So, what's the conclusion from this.
The market looks like softening in the short term (next two-three days). Any rise after that needs to be very good if it is to overcoming the sideways inertia of the market as indicated by the weekly charts. But the most recent candle on the weeklies is positive.
So, there is a chance that this market can go higher after a bit of consolidation. What happens in the next two-three days for the market seems to be the key to future medium term direction.
Taking a different perspective, on a single chart, is the chart at the very top, the 50-Leaders showing % of stocks above the 10/50/150 DSMAs. The market is clearly in the short-term over-bought sector. Medium term - it is getting close. Longer term it is still in no-man's land.
That more or less accords with the other charts.
So, it seems to me, we're looking at a little bit of softening in coming days. The extent of that will probably give an indication of further direction.
4600 on the XAO still looks like a highly significant area to get through. Until the market gets by that - it is just trending sideways.
Cheers
Red
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