By Russell Glaser – The S&P daily chart shows a strong trending environment that is supported by numerous technical indicators. This presents traders with an opportunity to trade in a trending environment, utilizing appropriate strategies to enter and exit the market.
The Forex Technical Analysis below shows the daily chart for the S&P 500. The daily displays a strong upward sloping trend line that began in early February. Using a few technical tools to profile, a trending environment will be apparent.
The strong trending environment is shown by the ADX 14. The indicator currently reads 53. Any reading above 40 indicates a strong trending environment.
Also shown is the 14-day Relative Strength Indicator. By drawing a trend line underneath this indicator, it can help to identify the trend and eventually serve as a signal as to when the trend is broken. One signal of a broken trend occurs when the RSI breaks below its positive sloping trend line.
This trend is also supported by simple moving averages that are in a perfect order, meaning the price action is above the 20-day, 50-day, 100-day, and 200-day in that order.
Now that the trending environment has been identified, traders can enter the market on a break of a key resistance line or wait for a retracement to a Fibonacci level.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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