The Percentage of Nasdaq Stocks above the 50-day MA reversed just shy of overbought territory. Technicals also turned tail before hitting the overbought mark. This increases the probability for another leg higher before a true top comes into play. This will offer another chance to take profits should it come to fruition.
Meanwhile, the Nasdaq is not showing any obvious signs of a top. So it's left to breadth metrics to suggest a top is in place.
The Russell 2000 reversed off channel resistance in a potential short play opportunity. Stops go on a break of 1,008.
The Dow is another index at channel resistance. Stops for shorts on a break above 15,542.
Next week will be about preserving profits, and building potential short plays second. Large and Small Caps are offering good shorting opportunities. The Nasdaq is suggesting a top, but another throw over leg higher is not outside the realms of possibility. Be Prepared.
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. You can read what others are saying about Zignals on Investimonials.com.
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