NASDAQ Composite (.IXIC) developments helped investors ignore concerns about the month long partial shutdown of the U.S. government

NASDAQ Composite (.IXIC) developments helped investors ignore concerns about the month long partial shutdown of the U.S. government

NASDAQ Composite (.IXIC) developments helped investors ignore concerns about the month long partial shutdown of the U.S. government

The bull-run of the U.S. stocks continued for the fourth straight day on Friday following positive news on the trade war front. These developments helped investors ignore concerns about the month long partial shutdown of the U.S. government. All three major stock indexes ended in the green. For the week also, indexes closed in positive territory.

The Dow Jones Industrial Average (DJI) closed at 24,706.35, gaining 1.4% or 336.25 points. The S&P 500 Index (INX) also climbed 1.3% to close at 2,670.71. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 7,157.23, rising 1%. A total of 7.99 billion shares were traded on Friday, lower than the last 20-session average of 8.44 billion shares. Advancers outnumbered decliners on the NYSE by 2.93-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 2.26-to-1 ratio.  The CBOE VIX decreased 1.4% to close at 17.80.

How Did the Benchmarks Perform?

The Dow ended in positive territory for the fourth successive day. Notably, all 30 stocks of the blue-chip index finished in the green. The tech-heavy Nasdaq Composite also ended in the green after rallying for four straight days, due to strong performance by large-cap tech stocks.

The S&P 500 closed in positive territory for the fourth consecutive day. The Energy Select Sector SPDR (XLE), Industrials Select Sector SPDR (XLI) and Financials Select Sector SPDR (XLF) are major gainers with 2%, 1.7% and 1.6%, respectively. Notably, all 11 sectors of the benchmark index closed in the green.

Positive Developments on Trade War Front

On Jan 18, Bloomberg reported that China has offered to ramp up imports from the United State in the next six years. Total value of these imports will be $1 trillion which will bring down massive trade deficit that United States is currently bearing with China to zero in 2024. Some officials who are engaged in the ensuing United States – China trade negotiations have revealed this information. Notably, the United States had a trade deficit of $323 billion with China in 2018.

On Jan 16, The Wall Street Journal reported that the U.S. government is contemplating a proposal regarding lifting of some tariffs imposed on China. This will act as an incentive to the Asian economic giant to make deeper concessions to the United States.However, a Treasury Department spokesperson later denied the news.

China has already provided assurance of importing “a substantial amount” of agricultural, energy and manufactured goods and services from the United States.The three-day meeting between mid-level delegations of the United States and China ended on a positive note on Jan 5. This meeting had laid the foundation for further negotiations to forge a permanent deal in order to resolve the trade disputes between the two largest trading nations of the world.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 7,542.64.

The projected lower bound is: 6,764.95.

The projected closing price is: 7,153.80.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 9 white candles and 1 black candles for a net of 8 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 85.8894. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 60.96. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 16 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 120.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 1 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 12 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 72.765 at 7,157.228. Volume was 1% above average (neutral) and Bollinger Bands were 45% wider than normal.

Open High Low Close Volume___
7,134.0957,185.3847,096.6217,157.228 632,263,040

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 6,984.12 6,980.38 7,451.43
Volatility: 14 36 25
Volume: 548,114,816 623,031,680 555,787,968

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

NASDAQ COMPOSITE is currently 3.9% below its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into .IXIC (mildly bullish). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 7 periods.

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