The best performing index yesterday was the Dow Jones Industrials which managed to eke out a new multi-year high on the cash index as it closed at 11354 seven points ahead of its close on the 21st.

The chart for DIA shows that this index has the most constructive looking formation as it appears to have broken above its recent upper range whereas the S&P 500 is still finding that the 1310 level is acting as formidable resistance.

The Russell 2000 has been consolidating since its impressive gains from last week but in yesterday's trading, as the long upper shadow suggests, there was an inability to hold on to its earlier gains.

There have been plenty of Doji candlesticks on the index charts in recent days and yesterday we see a classic pattern on the chart for the Nasdaq Composite (^IXIC). Perhaps it is because we are in the midst of earnings announcements but the market is showing a pronounced lack of resolve and follow-through from the big upward moves of last week.

One of the weakest sectors recently has been the biotechnology sector and as the chart for IBB shows the 200 day EMA has so far failed to provide support. The last two days have pushed below the low from earlier in April but we could be setting up for some positive divergences.

TRADE OPPORTUNITIES/SETUPS FOR THURSDAY APRIL 27, 2006

The patterns identified below should be considered as indicative of eventual price direction in forthcoming trading sessions. None of these setups should be seen as specifically opportune for the current trading session.

We would expect Infosys (INFY) to rally again soon, but as we have remarked already this week if we were to witness a bull flag failure pattern that would be a useful signal itself.

Similar comments that we made in regard to INFY could also be made in connection with the chart for State Street Corp (STT)

CHRW dropped by more than 8% yesterday and the pattern should be familiar to our readers.

Urban Outfitters (URBN) could be preparing to rally from a channel formation in the context of a basing pattern with positive MFI and momentum divergences.

We mentioned AMD yesterday on the short side but although it came close it failed to meet our entry target. We repeat the recommendation for today's trading.

United Parcel Services (UPS) looks somewhat extended after its impressive rise since early February.

AEOS has moved to new highs recently without confirmation from the volume and momentum indicators

Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market. He specializes in market neutral investing and and is currently working on a book about the benefits of trading with long/short strategies, which is scheduled for publication later this year.

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