Saturday, August 11, 2007

Positive End to the Week?

Interestingly enough, the TSX Composite Index rallied in the last hour of trading on Friday, as shown in the intra-day chart below, ending the day down only 11.73 points.

Over the past few Fridays, the Index had collapsed in the final few hours of the day as traders apparently did not want to maintain positions over the weekend. What changed their minds this week?

Looking at the three-month chart of the Index below, the last two lows had very similar 'bars' with closes near the top for the day. I believe these are also referred to as 'hammer candles' if one were to examine them on a candlestick chart. This type of hammer is a sign of a potential change in a downward trend.

After the past few rough weeks, any upswing, even if only temporary, would be welcoming and might present an excellent opportunity to make new positions in quality stocks and/or lower cost averages on recent investments.

1 comment:

White Eagle said...

So much for the upswing... after being up as high as 13,652, the TSX Index ended the day at its session low of 13,427 (down another 38.83 points today).