Following up on my previous post that an Ascending Triangle is forming.
Yesterday’s price action has give us a confirmation that the price level has bounce off the Tenkan sen which is near the trendline of the triangle.
On top of that, we have a doji formed.
This is a good setup and the next move will be to see if it pierce through the kumo on the Ichimoku chart for a year end rally.
The SPX close with the level cutting the Tenkan sen.
As we can see, Tenkan sen has have a very steep rise couple of sessions back.
My personal rules is:
– if the rise is sharp, then it is time to take profit once it cuts the Tenkan sen
On another note, we can see that the curve for SPX seems to be flattening; a sign of diminishing returns or consolidation.
So, is this a good time to go long on various counters?
Personal gut feel, the gains may not be as substantial as before. With a number of stocks rising because of stimulants plans, quarterly reports for next year are going to provide challenge to the existing stock valuation.
Note:
Trade based on what the chart says…not on gut feel
