Tuesday, April 23, 2013

Daily Market Commentary: Tech Resistance Failed

Yesterday's buying managed to bring Tech indices to former rising channel support, pushing them beyond resistance with relative ease.  This was supported by higher volume accumulation. So despite the weak Tech breadth, buying was able to continue.

The Nasdaq 100 illustrated this best with the move to challenge the 'bull trap'.


Now it's the turn of the Russell 2000 to challenge support-turned-resistance.  It's also sitting at a new 'Death Cross' between 20-day and 50-day MAs.


The Percentage of Nasdaq Stocks Above 50-day MA is in the process of confirming a swing low, although other Tech breadth indices are someway from doing the same.


However, with the breadth improvement, there may be enough to support a short term rally, or at least a challenge on the last swing high of 3,306 in the Nasdaq.


Today's buying suggests the rally isn't quite over yet. However, it is getting mature, and a 10-15% correction (from last swing high) - if it hasn't started already - isn't far off.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. You can read what others are saying about Zignals on Investimonials.com.

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