What a week it was for the Dow Jones Industrial Average (INDEXDJX: DJI)! The highly followed index gained 512.00 points from the close of last week. In the previous Weekly Market Report I pointed out the 96.00 area as a support and mentioned that the market will rarely rollover when everyone is expecting it to do so. This week the head and shoulders top formation that was in place and being viewed by everyone is now a failed pattern which can often lead to a large move in the opposite direction. This is exactly what occurred last week. This coming trading week is also an options expiration week which is usually very choppy and volatile. Something interesting to take note of is that the only two corrections prior to the April 2010 top were for about 7-8 percent each and this recent correction was for around 15 percent from peak to trough before this week’s bounce. Symmetry anyone?
The SPDR Gold Trust (ETF) (NYSE:GLD) started last week lower before climbing back at the end of the week to close basically flat. The very popular GLD still remains in a strong weekly uptrend. As long as price remains above the weekly 20 and 50 moving averages the trend is intact and can be bought on pullbacks. Spot gold remains in a bull market that started in 2001. Therefore, corrections along the way will occur for the precious metal. It is very important to realize that gold is the world’s true reserve currency since recorded history, and should do well as long as central banks around the world continue to print money in order to inflate stock market indexes. Learn our key levels, understand what moves Gold and commodities, the profits will follow.
Research In Motion Limited (USA) (NASDAQ:RIMM) has been a beaten down stock since late March 2010. This past week the stock reversed sharply higher from a severely oversold condition on the weekly chart. As long as the overall stock market holds up RIMM could test the $55.00 level in the near term. The stock will also have major weekly chart resistance around the $61.00 level should it trade back up there. Research In Motion LTD is facing major competition from the likes of Apple Corp (NYSE:AAPL), Motorola Inc (NYSE:MOT), and countless other technology companies in the wireless communication space. There is plenty of money to be made trading the opportunities presented in this stock and sector.
Monsanto Company (NYSE:MON) is a leading agriculture stock that has been crushed in 2010. This stock topped out in January 2010 at $87.06 and traded as low as $44.61 last week before surging higher and closing the week at $51.21. At this time this appears to be a severely oversold technical bounce. Please remember when the U.S. Dollar declines it will usually lift most inflationary stocks such as Mosanto Co, Potash Corp./Saskatchewan (USA) (NYSE:POT), and The Mosaic Company (NYSE:MOS). Monsanto Co will have very good weekly resistance around the $55.00 level in the near term.
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