Tonight I was just gazing at the charts and I realized there is a reverse head and shoulders formation for the DIA and the SPY. This is a bullish formation and could give us a very nice upside rally. But don't be too quick to jump in! Price has to break through the resistance line.
The probable rally afterwards is calculated by taking the high after the left shoulder, and subtracting the low of the head. The difference is added to the breakout price to get the potential upside target.
For the SPY that would be as follows in approximate numbers.
128.00 - 116 = 12.00
126.50 + 12.00 = 138.50 Target Potential
For the DIA
122.00 - 112.00 = 10.00
122.50 + 10.00 = 132.50 Target Potential
Look for Volume and Pace on the breakout to avoid false moves. And yet, this will most likely occur during a holiday week where volume is poor historically. It will be a difficult call for each of us to make.
Personally I am most likely going to watch from the sidelines, or not at all, as I enjoy the holidays. SPY and DIA charts below. Happy Trading!!
Momentum - Up
Trend - Sideways
Merry Christmas to all and a Hapy New Year~!
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