Thursday, June 17, 2021

Nasdaq Primed to Breakout as Russell 2000 tests 50-day MA

Some decent stuff from indices without rocking the boat.

The Nasdaq is back pressuring the 'bull trap' as it looks to break to new all-time highs above 14,211. Technicals are net positive including a relative performance advantage over the Russell 2000.  Trading volume is a little light for a resistance challenge, but I would look for this to change on the break.

The Russell 2000 fell outside of its handle, but today's close - while lower - marked a successful test of the 50-day MA on bullish hammer on higher volume.  Technicals may have shifted negative with On-Balance-Volume and ADX both on 'sell' triggers, but I would lean on price action more here.  This still looks good for a break of March swing highs.


The S&P fell out of its rising trend, but like the Nasdaq is poised to breakout.  The 200-day MA and 50-day MA have converged through most of 2021, but the index is currently defending its 20-day MA (successfully).  Aside from momentum, technicals are bearish, but price action is dominant.  Should be enough to drive a breakout given the surge in trading volume.


Indices are pressuring resistance in a manner favoring a follow through move higher.  Sneaky traders could buy in anticipation, but don't hold if prices drift strongly away from resistance. 

You've now read my opinion, next read Douglas' blog.

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