TECHNICAL ANALYSIS: TSX Back in Black To The Tune of 20 Pts After Midday Slump


The TSX is back in black to the tune of 20 points. This after it had lost strong early gains that saw it up around 100 points after only 30 minutes, before it saw more red on the heels of Thursday's market massacre. Around midday it looked the index could test the April lows near 11,916. A close through that level could lead to a test of the November 2012 weekly low near 11,761.

The 50-day moving average crossed below the 200-day moving average last week, which is known as the "death cross" - describing a situation where a long term negative trend is in place.

The rapid decline in prices has pushed the RSI (relative strength index) down to an index level of 33, which is on the low end of the neutral range for this indicator. The RSI is an oscillator that measures overbought and oversold levels. Readings above 70 are considered overbought while levels below 30 are defined as oversold.

Momentum is negative as reflected by the MACD (moving average convergence divergence index). The MACD is printing in negative territory, but the trajectory of the index is flattening, reflecting declining negative momentum. It seems as the TSX approaches support levels, negative momentum loses strength.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

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MT Newswires

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