[PLATINUM INSIGHTS] 12.8.22 how the market may move based on chart analysis!

On the economic front, investors await the latest data on weekly jobless claims before the bell on Thursday. Economists polled by Dow Jones are anticipating a reading of 230,000, up slightly from the prior week’s total of 225,000. 

Tomorrow, we have the PPI and University of Michigan’s Consumer Sentiment Index. Next week will be the CPI and the FED Funds Rate announcement.   

ASCENDING WEDGE: We are seeing a trading pattern on the S&P 500 chart (outlined in the white box) called the “Ascending Wedge”. The ascending wedge develops when the upper trendline and lower trendline converge at the apex while adhering to an upward trajectory. 

Visually, the ascending wedge’s upper and lower trendlines have positive slopes, suggesting that price is rising as time goes on. Also, as each trendline rises, the distance or “range” between the two decreases. 

The result is the appearance of an elongated, upward-tilted triangle.  The ascending wedge tells us two things: price is becoming compressed, and the periodic rally may be approaching exhaustion. Given this information, the chances of a market reversing its course are significant.  

This information is for educational purposes only and is not a recommendation to buy or sell a security.

Resistance & Support Levels:  

One of our guidelines focuses on resistance levels.  A resistance level is a key tool in technical analysis, indicating when an asset has reached a price level that market participants are unwilling to surpass. Resistance levels are often used in conjunction with support levels, or the point at which traders are unwilling to let an asset’s price drop much lower. 

We will often identify areas of support and resistance in order to make decisions on trades, including when to place stop-losses and take-profits.  If an asset does break through its resistance level, then some traders believe it will carry on rising in price, or ‘rally’, until a new resistance level is found.  

I’ve attached a current chart for DE as an example for resistance levels. We see that price action over the last 10 days has been centered around the Resistance Level of 441.29. It will be interesting to see if DE can finally break this level or start to decline. Also take note of the 9-day SMA.   

This information is for educational purposes only and is not a recommendation to buy or sell a security.