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Thursday, May 01, 2008 

The beginning of the upturn in the stock market is in place

The end of cutting interest may mark the beginning of the upturn in the stock market, this was one reality in the past and should be again. In the six months that followed the last cut of interest in the U.S., the stock market rose. These are the lessons of the past that should be considered; and in addition we will have elections late this year, generally another fact that contributes to the recovery of the market. The American economy remains weak as the indicators still showing, walking in a recessionary tone and the elements of uncertainty continue to dominate the markets. However, there are some experts out there who are beginning to believe that the end of the cut-rates will start a break in the expansionary monetary policy or the end of the cycle of lowering the cost of money. In case of the confirmation of this view, this may be the ideal time to return to buying in the stock market, judging by the behaviour of markets in previous crises and economic recessions. Honestly, I have the conviction that this rule must be always followed, because the history remains in the mind of the professional traders, and usually tends to repeat. Everybody knows that the act of make money in the stock market is not so easy like many people thought, be a winner in this crazy world, in generally is an act of guessing the cycle before the others. If you look carefully for the past recessions, or in other words for the past crises, every time that the market starts showing the first signals in the sentiment change the macro economic picture just show a few promising signs of recovery, but nothing really good. So, I think that we are leaving the bottom of the market, and the coming days will indicate the start of a new Bullish cycle !!! The future will tell, but frankly speaking I started buying stocks, because my feeling is that we found the bottom in the market and we are just in front of a future that promises to be bright !!!

Chart courtesy of stockcharts ( click to enlarge )

If the technology still hasn't gave you enough excitement, look at this stock chart. After hitting rock bottom of $2.52 cents per share in March, the stock spiked 35% to $3.37, apparently reflecting accumulation or investors who had sold the stock. Although 50 day moving average is still below 200 day moving average recently upward trend has brought the stock price above 20 and 50 moving averages. In addition with KD going upwards and MACD rising above 0, we should expect more upside on this stock.

Chart courtesy of stockcharts ( click to enlarge )

GOOG - The stock broke through its 200-day moving average, a very "bullish" sign.

Chart courtesy of stockcharts ( click to enlarge )

TRN is my stock pick for tomorrow. Trinity Industries, Inc. reported a 10% Growth in earnings for First Quarter and Backlog in Excess of $1.6 Billion in Structural Wind Towers Businesss. For the second quarter of 2008, the Company expects earnings from continuing operations ranging from $0.85 to $0.90 per common diluted share. For 2008, the Company expects earnings from continuing operations ranging from $3.20 to $3.45 per common diluted share. The technical chart shows possibility of new rally as the stock is near to break an important area of resistance. In addition with the stock breaking above 200 day moving average we may probably see more buyers coming, because there are plenty of upside for this stock.

Disclaimer : Trading stocks involves risk, this information should not be viewed as trading recommendations. The charts provided here are not meant for investment purposes and only serve as technical examples.

That's All. Have a nice evening !!!


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the bottom was 1000 points ago not here-we are going lower my friend

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About Me

  • I'm a 48 year old Independent Trader using proprietary technical analysis with more than 20 years experience of investing in the US stock markets. I started this blog in 2006 simply as a way to share my thoughts about capital, risk management, and trading. My blog contains only my personal opinion and is provided for informational purposes only.

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