Summary:
- Bellwether transport stock Fedex completes a cup-and-handle continuation pattern.
- The Dow continues its strong up-trend.
Bellwether transport stock Fedex completed a strong cup and handle continuation pattern, offering a target of 160*. Recovery of 13-week Twiggs Money Flow above zero and the descending trendline indicates medium-term buying pressure. Breakout brings a warm glow as I find Fedex one of the most reliable indicators of overall market direction — as in November 2007.
* Target calculation: 145 + ( 145 – 130 ) = 160
Dow Jones Industrial Average is testing medium-term resistance at 17000. Breakout is likely and would signal an advance to 17500*. Recovery of 13-week Twiggs Money Flow above the descending trendline would indicate medium-term buying pressure. Reversal below 16750 is unlikely, but would warn of a correction.
* Target calculation: 16500 + ( 16500 – 15500 ) = 17500