Tuesday, January 20, 2009

Ugly chart of the day: BAC

Looking for the ugliest chart to short and BAC was reviewed by upsidetrader as well.   On the daily chart we can see the stair step lower lows and lower highs and now it has broken through support at $10.  This looks like a good candidate to go lower.  Both the 200-dma and the 50-dma are declining and the trend line is definitely negative.

Perhaps financials will reverse, but it's not likely any time soon.  This is a day-trade or swing- trade set up and I'll set my buy-stop at $8 for the day.  The real resistance is $10 and on a longer time frame this could be used for the buy-stop.

The ten-minute graph above shows the shorter term upside resistance which should be the day or week buy-stop.  

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