DJIA Index & Facebook Stock Forecast
The next pivot points in the markets are the final part of August…August 28-31st, 2012
- September 12th
- September 28th
Keep an eye on the patterns revolving around pivot point days. The pivot point forecast is only another tool in the tool box, not a crystal ball. You can’t rely on a magic bullet because there are none. When I look at all of the charts I need to look at throughout the day…Forex….Stocks…Bonds…I don’t rely on only one thing, For me Elliott Wave with pattern recognition, aligning with my Swing Trading Forecast Model are the tools used most of the time in my toolbox. Everyone has their niche, you have to find yours. Remember…The Facebook stock forecast is high probability not a guarantee and the DJIA Index is still topping, I’am not a buyer at these levels. I would need to see above average volume on a breakout to get excited. One thing is for sure, when it comes to the financial markets, anything is possible, you can’t be dogmatic on anything. As far as the Facebook stock forecast goes…I’am not recommending it…it’s only for illustration purposes.
The August 13th pivot point ended up being a low in the markets. Notice the diversion between the price and the RSI. The RSI is descending and the price of the DJIA Index is going up…on low volume too…even though it is summer…less than most summers…not shown.
The August 13th pivot point ended up being a low in the markets. The Wilshire 5000 Composite Gives you the whole picture of what’s going with all of the companies. The price went through resistance on the hourly chart but it’s not uncommon for the price to fall again when there is lack of volume.
The weekly chart of the Wilshire 5000 Composite shows the long term channel, could the price break out? it could, the stochastics are in the overbought area but could stay there a while.
The S and P 500 is in the same channel as the DJIA Index for the weekly chart. It would take lots of money to take it above that channel. The stochastics are in the overbought area as well with a diversion between price and the stochastics indicator. It’s not uncommon for a chart to break out of resistance only to fall back down. The kicker here is the fact that volume is extremely low, even for the summer time. The price goes higher and the volume goes lower (the volume isn’t shown in the chart).
The Russell 2000 is lagging the other index’s, it’s not even close to the upper channel line. The stochastics aren’t in the overbought area but could go back up into the overbought area.
Here’s a monthly chart of the HUI Index.The price hasn’t gone through the center median line and is still holding it’s own. It’s not the end of the month yet so this chart doesn’t hold relevance till then, however, I still like to look at long term charts. The stochastics are in the oversold area and is still a good time to pick away at some good gold mining stocks. One thing to remember is that prices for the gold miners could stay low for a while, or they could go crazy to the upside, so don’t bet the farm on anything and don’t just buy one stock just in case that one stock has a bad period while all of the other counterparts are going up.
The GLD SPDR Gold Trust might have a bullish wedge in the making. Lots of commentators are talking about the descending triangle for Gold. Usually when everyone is seeing the same thing, that particular pattern doesn’t play out. There is the real possibility that gold might not break out like a lot of the Gold Bugs are thinking. There is the real possibility that gold could go to the 1400.00 area before going higher again. The channel you see in the chart shows how the price breached it and is now going sideways. Looks like the volume is down for buying the gold paper.
Last but not least…a 4 hour chart of the company that everyone is talking about. Remember in my post http://www.swingtradingforecast.com/facebook-ipo-price-per-share-38-23-at-the-close when the Facebook IPO was first launched and I said that IPO’s aren’t meant to buy out of the gate, this is why! more often than not they go down. Sure some go up but those are the ones you here about, Facebook was so hyped up it was almost a guarantee to go down . The chart above of Facebook gives you my forecast of the stock price in the future. I don’t know when the price of Facebook will reach the target of $14.84 per share but there’s high probability that there should be a decent pop from there. All I did was use basic Fibonacci to come to the conclusion. I should also add there is no guarantee that once the price reaches the 14.84 target the price doesn’t go below 14.85 to make new lows, that’s where other technical techniques come into play like pattern recognition and Elliott Wave analysis. For now I’am comfortable in saying that Facebook should get a pop at the 14.85 level, at this point right now I still wouldn’t buy it.
The Triangle Chart Pattern is one of the most powerful patterns with high probability I trade it whenever I see one. The waves aren’t labelled but they’re there. The time shown is for central standard time in North America.
I don’t like the way things are setting up in the world, you never know what could transpire, but in my opinion, the HUI Index is the only thing to be picking away at on the long side and that could go down too when the markets decide to correct. Then again there’s the cliché “the markets can stay irrational longer than you can stay liquid”. Patience is the key whether it’s for the DJIA Index or the Facebook Stock Forecast.