Daily Market Commentary: 50-day MAs Defended Yet Again

Yesterday's selling on volume had all the makings for a bearish follow through. However, bulls were again able to step in and hold support.

For the S&P this support came at the channel. Volume was lighter but the narrow range makes it easier to place a swing trade; trade break of high/low and place stop on the flip side of today's range.


via StockCharts.com

The Nasdaq was more vulnerable given it had dropped outside of its channel for a second time with a powerful breakdown gap. Despite holding its 50-day MA just a few days ago, it was again left to bulls to defend the moving average in the space of a few days. Buying volume was light - another reason to be suspicious. A push to 2,670 remains favoured but while the 50-day MA holds it is a moving average 'buy'.


via StockCharts.com

The Russell 2000 is evolving into a more gentle ascent, but it did well to defend its 20-day MA. The bearish divergence in the MACD is more of a concern.


via StockCharts.com

So today belonged to the bulls, but it felt more like a stall in the decline rather than a last stand. The narrow intraday range gives swing traders something to play with - as do 50-day MAs and channel support. Should these break it will give the impetus back to bears.

Follow Me on Twitter

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.

Zignals offers a full suite of FREE financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash.

You can read what others are saying about Zignals on Investimonials.com.


Popular posts from this blog

Markets attempt a swing low for the seven day decline

Low volume selling after Russell 2000 breakout

Minor losses pressure Thursday's reversal attempt


Show more