Over the weekend I put last week’s bad performance into perspective, what happens after such a week (more downside), and how bad NYA’s monthly chart looks (hasn’t gotten any better with today’s action 😉 ). Please click here to read my weekend update.
Today I want to focus on the daily and weekly chart. Zoom in. Starting with the daily chart, we see that price has now traded outside the lower bollinger band. Often this means, in this bull market, that price wants to move inside. Hence if history is any guide, expect sideways/up over the next few days. Price has now also almost retraced 62% of the previous uptrend, which should provide some support. However, there is no real daily support until about 10,200 (S2 level -not shown- is at 10,545), which is also where the yellow trendline resides (see 2-day chart for a good perspective of these trenlines).
Figure 1: daily chart with Fib retrace levels (click to enlarge)
Note how the daily bollinger bands are fast expanding with price dragging down and along the lower band: serious weakness. Until these bands start to bottom and curve back up, downside will resume. The weekly chart (Figure 3) now also starts to show expanding bands. Although the week just started, and a lot can happen over the next 4 more days, it is not a good sign. Expanding bands on a weekly time frame with dropping prices means severe weakness (see for example the previous decline)
Figure 2: 2-day chart showing trend channels. (click to enlarge)
The 2-day chart shows the ascending channels price has been in since the low in 2011. If price breaks below the lower line of the yellow and white channel it simple means the trend has changed and is downward from there on. Below the white trend line there is not much support until price hits the trendline that connects the 2009 and 2011 low; not shown, which currently resides at ~9,150. The weekly chart (Figure 3) doesn’t look much better than the monthly chart: sell signal on the MACD, which has been trending down since this summer. Sell signal on the FSTO. Negative divergence on the RSI5. The TRIX never produced a buy signal since August, and negative divergence on the CCI as well.
Figure 3. Weekly chart (click to enlarge).
Price found support in October at the 100w SMA, which is now at 10,075 and the last line of defense for the bulls before ~9000 is next, which is also where the 200w SMA resides together with the weekly S1 level. I wish I could make it any more positive, but it simple ain’t. The charts are what they are. A week or so ago I pointed out the similarities between the past few months and those of the summer of 2011. (See here). So far everything has played out accordingly: forewarned is forearmed! Notice how the weekly bollinger bands are now starting to expand as well. Unless the bulls can turn this around real fast, and so far there is no sign in the charts that they will (there’s no buy signal on the hourly, daily or weekly), together with the monthly chart, it all does look rather weak and bleak.
FYI: Premium Member Weekly Digests older than 1 month are now available to everybody. Please see here