Wednesday, July 14, 2010

Daily Chart Outlook (July 14th)

We here notice a Fib configuration with a deep retracement (>100%), where the 2nd expansion level coincides with a trendline breakout.
We do also take into consideration a very early MTFS crossover above oversold territory, which is a configuration generally conducive to failed recoveries. The trendline (lower highs) has now been hit, leading to a narrowing of the range and eventually a breakout.
At this point in time, we would favour another minor retracement even though buying pressure is still high on lower time frames. We can therefore anticipate continuation of this difficult environment at least until the underlying longer term selling pressure dissipates over the next few weeks.