Monday, February 22, 2016

Dow Breakout - Double Bottom In Place?

The Dow is the first of lead indices to confirm a 'Double Bottom' with a neckline break of 16,500. The index tagged the 20-day MA in the process. Bears will need a 'bull trap' to regain control, but they will find it much harder to sustain a move below 16,500 which will now be viewed as an accumulation zone. The 50-day MA will be tomorrow's challenge, but momentum is on its side.  The question is whether other indices can follow suit?


The S&P finished on its neckline. Any further gain will register as a breakout. As with the Dow, the 50-day MA is just above at 1,951 to offer supply.


The Nasdaq returned a respectable gain without changing the overall picture a great deal. On-Balance-Volume returned a 'buy' trigger, and the index is on the verge of a relative 'buy' trigger against the S&P.  Volume was a little disappointing, but additional gains will get the FOMO crowd involved. Real supply doesn't kick in until 4,900.


The Nasdaq 100 actually registered a breakout of its own, although it hasn't made the same strength of move as the Dow did. Today's move was accompanied by a 'buy' trigger in On-Balance-Volume.



The Russell 2000 is still playing to a 'bear trap'. It has room to run before it reaches supply which gives bulls room to play with. For this week, look for a challenge of the January swing high around 1,035.


For tomorrow, it will be about indices consolidating their breakouts and challenging 50-day MAs.  Modest losses acceptable, but important they stay around the upper regions of last week's gains.

You've now read my opinion, next read Douglas' and Jani's.

Share on StockTwits

---

Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.

Follow Me on Twitter




Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. I also trade on eToro and can be copied for free.

JOIN ZIGNALS TODAY - IT'S FREE!
 
f9229fcfd1b1390be00cfccc86c90349c93a4179bf4227457c