Technical Analysis: A Nice Bounce, But…

The most notable aspect of today’s trading was the very poor upside volume on the NYSE and the Nasdaq: neither exchange could register even 70% upside volume. That suggests the possibility of more downside next week. The Dow (first chart below) stalled at 9135-9162 (9150) resistance. Next resistance is 9261 and 9352, and 9000-9036 and 8950 are support. The S&P (second chart) stalled at the 1000 level. Above that, resistance is 1002-1004, 1010 and 1015, and 987-988 is critical support. The Nasdaq (third chart) managed to push into the 1735-1747 resistance zone. If it can clear that, 1758 is next. Support is 1715, 1700 and 1685. The Transports (fourth chart) are the one potentially bullish chart here; a new closing high on Monday would form a bullish continuation pattern called “rising three methods.” The equity put-call ratio was high today, but about 100,000 of those puts came in just two trades.

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