Technical Analysis: Techs Stay Stuck
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Tech stocks continued to underperform today, but they'll try again tomorrow. Corrections continue to be muted affairs, and this one may well continue that trend if stocks can make it through the week relatively unscathed, since end of the month inflows will support the market next week. But until technology begins to outperform, blue chips appear to be the better bet for now. Perhaps Microsoft can change the equation with its earnings report Thursday night. The Nasdaq (first chart below) seems to be forming a new uptrend line with its early November low, but like all such trendlines that have formed in the last couple of months, they suggest a more muted rally going forward. To hold that trendline, the Nasdaq needs to hold 2429 support for tomorrow, just two points below today's close. To the upside, resistance is 2437, 2444 and 2455. The Dow (second chart) has support at 12,500, 12,485 and 12,450, and resistance is 12,553, 12,614 and 12,640. The S&P (third chart) has support at 1421, 1416, 1413 and 1411, and resistance is 1431, 1435 and 1440. In short, the orderly declines and lack of downside momentum so far suggest just another correction in an uptrend. Bond yields (fourth chart) are threatening another move higher too.