Sunday, May 24, 2020

Nasdaq waits for other indices to follow its lead

Investors have been keen to buy tech stocks but there has been a general reluctance to buy into other Large Caps and smaller growth stocks - a few exceptions aside. 

The Nasdaq had edged a breakout into the February gap down but didn't fill this gap; typically, when trading enters a gap it usually closes it quickly because there isn't historic supply or demand to stall the action. But this hasn't been the case for the Nasdaq. As a result, the index is sitting on breakout support, waiting for buyers to push things higher. On a positive front, all supporting technicals are bullish. Also, trading volume has remained robust - there is still interest in tech stocks. 

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Wednesday, May 20, 2020

Markets Reach Decision Point

Another resistance level reached - another level to break. The Nasdaq looks to be first in trying to push beyond the level established by the February gap down. If it succeeds, then it will have the upper level of that gap, then only the February high before we are talking of Covid as yet another V-recovery. I think the more likely outcome is a broad trading range, bound by the February and March high/lows. But, for now, buyers don't seem done yet. 

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Monday, May 18, 2020

Buyers push gains as challenges remain

A strong start to the week was backed by bullish accumulation across indices. There is still overhead resistance to contend with but today's close was enough to see indices approach breakdown gaps from the Covid sell off.

The S&P broke into the 'bull trap' zone but remained pegged to 200-day MA resistance. However, the breakout didn't reverse relative underperformance against the Russell 2000.

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Sunday, May 17, 2020

Buyers can't reverse week's losses

The week started with losses but the buying of Thursday and Friday wasn't enough to claw back those losses. Buying volume was lighter than earlier selling so there are still doubts traders have the desire to push this to new (pre-Covid) highs. 

The S&P does have some bullish markers to work with. Despite the lighter volume buying from Thursday and Friday, On-Balance-Volume is on a 'buy' signal as Stochastics [39,1] are in comfortable bullish territory. The index is outperforming the Russell 2000, but is lagging the Nasdaq. 

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