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August 30, 2005
Bank on Middies
If the market does confirm Monday’s reversal day with strong follow through, I would expect the old guard to lead the way higher. By that, I mean the stocks that have been leading this market for the last four years: the S&P MidCap Index (MID) and S&P SmallCap Index (SML).
MDY formed a falling flag over the last four weeks and is nearing support from the April trendline. The stock formed a piercing pattern yesterday and this bullish candlestick reversal would be confirmed with further strength above 130. This would also confirm the falling flag and project a move above the early August high. As long as 130 holds, I would expect the stock to work its way towards support around 125.
Posted by Arthur B. Hill at August 30, 2005 08:45 AM