Tuesday, February 8, 2011

Strong Upside Bias For Dow Jones Until RSI Reaches Critical Overbought 80-85 Zones, 08-02-2011

On Wall Street, Dow Jones soars 72 points, gaining for the 7th straight sessions to 12233 level, spurred by gains on McDonald's (the biggest gainer) after reporting January sales that topped estimates. The S&P 500 added 0.4% to 1,324.57, also the highest since June 2008. Meanwhile, investors also took in stride a move by China's central bank to control inflation.

Job openings in the U.S. decreased in December to the lowest level in three months, signaling a sustained labor-market recovery will take time to develop. The number of positions waiting to be filled fell by 139,000 to 3.06m, the fewest since September. The number of people hired also dropped, as did the number of workers fired.

Sentiment was also boosted by positive remarks from CEOs of six of the 10 largest US homebuilders, citing the potential of a sales comeback in spring, traditionally their strongest season. Housing forecasts from Fannie Mae and Mortgage Bankers Association show new-home market will begin to rebound and will sustain through 2012, at least.

After the bell, Walt Disney reported profits that surpassed analysts’ estimates. Overall, DJIA’s rally remains intact, as corporate earnings and activities are broadly supportive of the notion that the economy is in a solid recovery phase.

We will only witness stronger profit taking corrections when the RSI hits the 80-85 zones.

Daily Dow Jones Is Experiencing Strong Upside Until RSI Reaches Critical Overbought 80-85 Zones.
DowJones08a-02-2011

Source: StockCharts.com

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