January 4, 2002
These extracts from my daily stock
trading diary are intended to illustrate the techniques used
in short-term share trading and should not
be interpreted as investment advice. Full terms and
conditions can be found at
The Dow broke clear of the 10200 resistance level,
closing at 10259 on reasonable volume. The bearish
divergence appears to be over.
The Nasdaq was more subdued, closing 0.5% up at 1675.
Conditions ripe for a January rally
Abby Cohen, Goldman Sachs chief investment
strategist, says that conditions are ripe for "a notable
January rally". While Barry Hyman of EKN feels that
"high valuations should keep investors
BUY, HOLD or Sell
Investment banks seem to be shy of making
SELL recommendations. (more)
Australia - ASX
The All Ords closed up at 3374 on reasonable
indicates that there
is still uncertainty. The 20-Day
is in overbought territory, confirming
that this is not a good time to enter the market.
The bearish MACD
divergence has weakened but should not be ignored.
It appears that the tide of optimism is carrying us into a
typical January rally. Bear in mind that February often
brings a correction.
There may be opportunities for short-term trading profits
over the next few weeks but be on your guard for a
correction. It is by no means clear that corporate profits
have recovered so stick to companies with sound
Short-term: Tighten up on stop
. Avoid new entries.
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