Thursday, March 24, 2011

Daily Market Commentary: Small Caps Break Channel

Bulls were able to continue with yesterday's buying. Volume was lighter so there was a degree of uncertainty to accompany the buying.

Small Caps pushed through its channel with a MACD trigger 'buy', but it has to break February highs before confidence can start to flow again.

($RUT)

via StockCharts.com

The Dow is in a battle between a minor channel breakout and resistance as defined by former support of the prior up trend. The good news for bulls is that it's the first index to turn net bullish technically.

($INDU)

via StockCharts.com


The Nasdaq 100 gapped powerfully higher - leaving behind a bullish island reversal. It has finished a shade below its 50-day MA which may curb buyer enthusiasm Friday.

($NDX)

via StockCharts.com

The semiconductor index also gapped to leave an island reversal. It has room to maneuver to its 50-day MA, with the 20-day MA current resistance. Looks good for a few more days of gains.

($SOX)

via StockCharts.com

How semiconductors continue will dictate how the Nasdaq acts against current channel resistance.

($COMPQ)

via StockCharts.com

With the S&P also pegged by channel resistance

($SPX)

via StockCharts.com

Friday should continue to offer longside opportunities for Small Caps, Semiconductors, Nasdaq 100 and Dow. If these perform, then look to the S&P and Nasdaq to follow through higher.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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