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August 30, 2005
Material Support
Just as a bearish engulfing confirmed resistance, a bullish engulfing is confirming support for the Materials SPDR (XLB). The stock is oversold and at support. This makes the bullish engulfing all the more intriguing. However, follow through is what separates fluff from substance. Right now, this is just an oversold bounce at support. Follow through above 27.7 would confirm the bullish engulfing and argue for further strength.
Posted by Arthur B. Hill at August 30, 2005 08:44 AM