MasterCard ($MA) : Bearish Tweezer Top


MasterCard ($MA) has been lagging behind its competitors in many areas in the market. More importantly, in the areas of innovation and new markets, it is now facing competition not just from traditional competitors like VISA but also the likes of PayPal, AliPay etc.

The chart shows a bullish run up of MasterCard with good strong volume breaking out of the thin Kumo resistance with a gap.

What troubles me is the candle reversal at the top. Almost the very next day after reaching its peak, $MA reverse at the same peak price level and the bears seems to be taking hold of the situation and reverse the whole gains in the same day. It could be short term traders cashing in their profits. After, a sell down could easily push it to the low $80 range.

To quote Bulkowski definition on Tweezers Top:

Tweezers top candlesticks are simple to find in a historical price series. Just look for two adjacent candles with the same high price in an uptrend. Candle theory says that the pair is supposed to be a bearish reversal because it illustrates overhead resistance, but my tests show that tweezers tops actually act as bullish continuations 56% of the time. That performance is, of course, near random. Thus, expect the breakout to be in any direction. With an overall performance ranking of 81 (where 1 is best), that suggests the price trend after the breakout is weak.

Trade with care.



$SPX . Kumo support and possible reversal


SPX has been dropping over the last few days.

Mostly driven by negative news from Europe rather than the issues over at the Super Committee.

Despite, the drop and the light trading volume during the last 3 days, SPX bullish trend is still intact.

With about 1 month to go, and the SPX trading at 1160, it presents an opportunity to take a long position going into the year end.

From the Ichimoku Daily Chart, we can see

1. Despite the bearish cross from Tenkan sen and Kijun sen, SPX is still trading above the kumo which suggest bullish trend is intact.

2. For the trend to hold, we need the rebound to stay above 1183 going into December.

Beyond December, it is not clear if SPX will clear 1240. It may also fail to pierce through 1240 in the new year.

Forex S&P500

$USDX . Weekly kumo resistance

If the recent drop is due to weakness of Euro and the strengthening of USD, then the /DX shows that we have an opportunity to play the reversal.