This past week on the Toronto Stock Exchange was a positive one. But is it staying that way? Let’s take a look at some basic technical analysis to see if it is.

Canadian Penny Stocks Chart

The week closed a 3 month high and broke through the resistance level. All signs are pointing to a continuing trend upward until a new resistant point is set and momentum slows. The MACD is showing high levels in the overbought side of things but I’ve never found that to be too reliable of an indicator. Moving Average crossover are usually a good sign of a shift in momentum but they are currently still in a large gap in the upward direction.

There are support levels at 11,730 and 11,460 which means that there is a distance to fall if the trend reverses and markets fall. Right now if the TSX is to remain strong it will need to maintain that psychological level of 12,000. Round numbers are always nice and many people are either entering or exiting at this level.

The thing about looking at technical analysis into the future is that it is difficult to predict the fundamental pieces of news that change the market sentiment. If you decide to take the technical analysis approach to investing in stocks then you should pay close attention to the fundamentals as well otherwise you may have some serious shocks in your investing strategy.

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