Things wanting good for the Nasdaq as technicals return internet bullish after a quick interval of bearishness. This coincided with the index nestled towards resistance helped by Friday’s tight intraday motion. The index is properly positioned for a breakout on Monday, particularly given the relative out-performance of the Nasdaq towards its friends.
The S&P misplaced a bit of floor on Friday, nevertheless it stays inside a downward channel which has the traits of a ‘bull flag’. While all technicals are nonetheless ‘net bearish’, the MACD could be very near a brand new ‘buy’ sign. An upside break would additionally take out the 50-day MA. However, with the relative efficiency of the index taking a nosedive towards Small Caps and Tech indices, the better choice could also be to take a brief commerce with a cease above the 50-day MA.
The Russell 2000 is morphing from a probably bearish ascending triangle to a bullish ‘bull flag’. Action from Thursday and Friday seems like a breakout of the ‘bull flag’. Technicals have additionally turned internet bullish with relative efficiency enhancing towards the Nasdaq. The most secure danger:reward is for longs to commerce utilizing a cease on a lack of 1,340; a cease on a lack of Friday’s low would have a excessive danger for whipsaw however is an alternate play for these looking for a tighter danger:reward.
For Monday, longs have the higher alternatives with the Nasdaq, Nasdaq 100 and Russell 2000. However, if there’s a weak begin or markets fade after the opening half hour, then the S&P might supply itself as a fast return brief play (right down to channel help).
You’ve now learn my opinion, subsequent learn Douglas’ weblog.
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SOURCE: Fallon Financial Commentary – Read whole story here.