Disclaimer: For education/entertainment purpose only. Invest at your own Risk
On Thursday 27th, the Dow Jones index closed at 11,100 which is two points lower than the previous close of 11102.
As we had said before, the trend will be bullish when the Dow Jones Index crosses 11,300 or bearish when the trend is below 10,700.
Let us wait till it becomes bullish or bearish.
Today, one of our members, Rob asked for opinion on the stock SAY
Here is my opinion. Please feel free to share your views.
Invest at your own risk.
First of all, in DreamTai, SAY has a low power ranking of 2.2. Usually, if a power ranking is above 5, it indicates that there is high buying volume.
Secondly, the blue moving average is almost horizontal.It should slope upwards to indicate a trend.
Have a look at the 36.8 area.
It is a major resistance zone.Many times previously, the stock had tried to go up at this area and was pushed back.
( Seven times as shown by the Orange lines )
So, this is a point to be careful.
Let us assume that the stock gains enough buying pressure to overcome this resistance point and go up. You see that the bulls will encounter another resistance point around 40.5. At that level, the bulls had failed three times previously while trying to go higher.
The question you have to ask yourself..is that is buying such a stock worth the risk ? It has two resistance levels to cross, horizontal trend, low buying volume
I leave it for you to decide. Personally, I prefer upwards moving stocks with no upwards resistance.
If you want to buy it, then you should ensure that it remains in the upwards sloping green channel. If it goes below the channel, the sell the stock and get out of your position.
If it it is bullish, it may face a resitance at 36.82 level, move down to bottom of channel (which is fine as long as it remains in the channel) and then move upwards and break the resistance point.
But one thing to consider..since the Power Ranking is just 2.2, will it get the critical mass of bullish buyers to cross that resistance ? (Note: Power Ranking indicates the bullish buying pressure)
So, which way will it go ? No one knows... But you have your game plan set up. You know what to do if it is going up. You know at what point to sell. Also, you know that at what point, it can face resistance and selling pressure.
Question by our member, Dennis:
Why is QQQQ showing a New BUY signal ?
Dennis, the new buy signal just means that if you had shorted QQQQ, you have to buy back and cover your short positions.
Dreamtai shows the New Buy New Sell signal just as a helpful aid to the users. You have to look at the stock before making decision that whether it is a real buy signal or if it is a signal to buy to cover your existing short positions.
For QQQQ, the BLUE dotted line is sloping downwards. So, the trend is down.
When the trend is down and the stock is below the moving average, we can only SELL SHORT. We can not buy the stock.
There were three points where you could have profitably shorted the stock ..as shown by the 3 arrows.
Assumin that you had shorted the stock, the green bar and NEW BUY SIGNAL means just get out of your short position. The green price bar does not mean BUY stocks. It just means cover your existing short positions.
If you had not shorted any stock, just ignore this signal.
Please read the two articles for which I have provided the links below:
http://dreamtai.blogspot.com/2006/05/
dreamtai-stock-trading-software-what.html#links
http://dreamtai.blogspot.com/2006/05/
stock-trend-and-trading-strategy.html#links
(c) Dreamtai Stock Trading Software
