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Weekly Report for April 28th - May 2nd, 2008 April 27, 2008- Market Summary In our last report, we noted that the bulls managed to stage a rally in response to the first wave of earnings releases. As you can see from the charts below, the bulls were able to extend their gains for another week, but many traders are now curious to see if the momentum will be able to continue as indexes approach the resistance of their respective 200-day moving averages. We've added
the Relative
Strength Index to several of the charts because it is nearing
the 70 level. We expect that this indicator will trigger overbought
conditions (above 70) once the stock gets closer to the mentioned
moving averages. An RSI reading near 70 will make the major indexes
prone to a sharp pullback.
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