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.

Share on StockTwits


Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.

Follow Me on Twitter

Investments are held in a pension fund on a buy-and-hold strategy.


Popular posts from this blog

Round 2 for the bearish "black" candlestick in S&P and Nasdaq

Big bearish engulfing patterns as positive start negated

Being "Right" but still losing...


Show more