Daily Market Commentary: Support at 200-day MAs

Friday's whitewash of an attempted bounce was followed with a positive test of 200-day MAs. Of those testing this key average, the Russell 2000 may offer the best buying opportunity off today's close.

First up is the Nasdaq. It posted a picture perfect touch of the 200-day MA at the day's low. Selling volume lightened - another positive, although the March reaction low is still a couple of day's selling away.

The Nasdaq 100 also tested its 200-day MA and is only a few points away from the March swing low.

The Russell 2000 is best positioned to take advantage of a 200-day MA test. Today brought a test of the January swing low with the 200-day MA only a few points below. Buyers might take an interest in this index tomorrow.

The S&P has room to maneuver down to its 200-day MA and the March swing low. Of all the indices it's in the best position to absorb another day or two of losses and still offer a long side opportunity.

The index most in trouble - and the one most likely to kill any bounce in the Nasdaq and Nasdaq 100 - is the semiconductor index. Friday saw a clean break of the 200-day MA and today added nearly another percentage point of loss. I have redrawn a broader channel to reflect this expanding weakness; support is a long way off...

For tomorrow, look to the Russell 2000 to lead a bounce. But a bounce in tech stocks will require a lead recovery in the semiconductor index.

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