THE DOT - if this turns orange or red be alert

Monday, September 22, 2008

The NDX technical outlook for week 22nd Sept.

The NDX performed obviously weaker last week (financials) and closed lower on a weekly basis after defending the crucial 1600 medium-term support. First, we need to close the gap/lap to 1699/1718 on the downside. The 170 point move will give back half to 62% before resuming the uptrend, which would be around 1690 respectively1665. Although the overall trend remains down medium-term (6 months), we have now set the lows for this leg and an upside consolidation is due. The weaker sector will be Tech, though since we can expect a bleak CAPEX quarter and everyone starts to price that in. The upside should be capped around the 50 day MA at 1840 for this upleg.

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