Nasdaq looks to reaffirm 200-day MA support
Friday was a good day for bulls and a nice finish to the week. Best of the action probably belonged to the Nasdaq as it bounced off the 200-day MA. The index closed above Thursday's open in what is shaping up as a week long swing low. Technicals are net bearish with relative performance accelerating away from the index, but if the Nasdaq can build from Friday it will attract buyers and improve the technical picture.
The S&P has had to work from the below its 200-day MA, to close on its 200-day MA. It's not an ideal scenario as the Nasdaq, but the index is outperforming the Russell 2000, so it's a realtively safe pair of hands as a long trade here.
The Russell 2000 is attempting to build support as its measured move target. It's not a natural area to build support, but if the Nasdaq and S&P are able to dig in at current levels it will provide the opportunity for bulls to work off. On another positive, Friday's buying ranked as accumulation.
It has been a tough couple of months for indices, but last week was an indication that the ground work for a bounce is in place. Ideally, we will want to see a gap open to put some separation on the developmental lows. Let's see what next week brings. Trade details can be found here.
You've now read my opinion, next read Douglas' blog.
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