Respectable gains on good volume

The concerns of overhead resistance discussed yesterday appear to be no more as the Dow and Nasdaq both pushed past May-July resistance. This raises the issue of overhead 50-day MAs as upside targets. The Russell 2000 has challenged (and broke) its 50-day MA.

The Nasdaq has some 100 points left to run before it encounters its 50-day MA:

The S&P did well to break through what is a heavy supply area. The fact is not overbought suggests it has a good chance of going even higher. Again, 50-day MA looks a good target to aim for:

Transports are nicely positioned following a confirmed double bottom. Managed an ideal test of Fibonacci support on the decline from its highs. Overbought stochastics suggests some meandering around its 50-day MA:

Whatever about the short term potential in this market, the longer term bottom is shaping up very nicely. Again, January lows were an important marker for a bottom with supporting action in the March and now July retracements. Markets are in a long term accumulation phase. Buy with a multi-year outlook (aka ROTH/IRA buy time).

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, market alerts and stock charts website

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