Tuesday, May 29, 2012

Daily Market Commentary: Approaching 20-day MA

After a few days of tight trading the nascent rally took another step higher. Volume rose to register an accumulation day (albeit against a low volume bank holiday Friday), but it's all good if you are a bull.

The one index which marked a technical improvement was the Russell 2000. Today saw a MACD trigger 'buy' as the index finished just below its 20-day MA and former support turned resistance.

The S&P is a day's gain away from the 20-day MA but it has an additional few days of upside before it encounters resistance at the declining channel.

It was the same story for the Nasdaq, although the 20-day MA is running close to falling channel resistance.

In general, the indices (with the exception of the Russell 2000) are very close to seeing MACD trigger 'buy' signals. A MACD 'buy' combined with a cross above 20-day MAs could offer fresh upside follow through for the indices.  Given the proximity of indices to their 20-day MAs it's looking likely tomorrow or Thursday will be the required follow through day to strengthen the rally.


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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 Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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