Thursday, April 14, 2011

Daily Market Commentary: Defence of Key Moving Averages

It was a reasonably good day for markets. Buyers were able to defend 20-day and/or 50-day moving averages, in some cases with higher volume.

The S&P finished with a bullish hammer on its 20-day MA, although the lack of oversold stochastics weakens the reversal potential of this candlestick. The low of the day almost back tested former channel resistance (turned support). As a sidenote, there was a 'buy' trigger for on-balance-volume.

($SPX)

via StockCharts.com

The Nasdaq defended its 20-day MA as the MACD switched to a 'sell' trigger.

($COMPQ)

via StockCharts.com

The Percentage of Nasdaq Stocks above the 50-day MA also turned to the "Dark Side" as technicals finished net bearish. This will increase selling pressure in the parent index.

($NAA50R)

via StockCharts.com

The Russell 2000 was able to defend its 50-day MA and finished the day at the day's high.

($RUT)

via StockCharts.com

While the Dow spiked low at its 50-day MA, but like for the S&P, momentum wasn't oversold. Volume climbed to register an accumulation day. Can it build on this with another attempt at 12,400 resistance? This would look to be it's best opportunity to do so.

($INDU)

via StockCharts.com

The Nasdaq 100 also held its 20-day MA, but saw 'sell' triggers for the MACD and on-balance-volume.

($NDX)

via StockCharts.com

So for Friday, look to the Dow and Russell 2000 to press their advantage. Stops can go on a loss of Thursday's lows.

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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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