Another bloody day on the markets. I wonder if they will continue in this downward trend. Let’s a take a look at a 3-month chart and do some very simple analysis on a 3-month chart of the TSX.  Clearly, there is a channel upwards, however today’s close is coming close to falling out of the channel.  When there is a breakout from a channel the direction of the price usually continues in the direction of the break out (in this case, downwards).

Another thing to consider are the support and resistance points.  As you can see, there was four closings in and around the 10,200 level without any closings higher.  This would be considered a resistance level.  Eventually though the price broke through the resistance moved upwards all the way to the recent high last week.  In general, once a resistance level has been broken, it becomes the new support price which is exampled in the chart at the beginning of June where there was a drop but bounced off of the support level.

Now we are approaching this support level again.  If we pass through it the TSX should continue downwards below 10,000.  Keep an eye out tomorrow for the 10,200 level.

Yesterday’s Picks:
UUU.TO – Open $2.94 – Close $2.80 (-4.76%)
MAA.V – Open $0.63 -  Close $0.58 (-7.69%)

What I’m looking at tomorrow:
NRI.TO – $0.365 – Getting lots of volume.  Take a look.
SDT.UN.TO – $2.80 – An 11% yield unit fund.  Get paid to hold this one.

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