NASDAQ Composite (.IXIC) index threatens to enter correction territory on Google, Facebook antitrust concerns
The Nasdaq Composite index COMP, -1.61% is on pace to close in correction territory, popularly defined as a benchmark index closing 10% below its most recent peak, which for the Nasdaq occurred on May 3, when it closed at 8,164.
The tech-heavy Nasdaq was under pressure Monday, falling 99 points, or 1.3%, to roughly 7,353 following reports over the weekend that the Justice Department was planning to begin an antitrust investigation into Google parent Alphabet Inc. GOOG, -6.11% On Monday, the Wall Street Journal reported that the FTC has “secured the rights to begin a potential investigation of Facebook Inc. [S: FB] and whether it has engaged in unlawful monopolistic practices.” Shares of Alphabet fell 3.4% Monday, while Facebook stock fell 1.4%.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 7,739.88.
The projected upper bound is: 7,554.94.
The projected lower bound is: 7,090.86.
The projected closing price is: 7,322.90.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 13.0720. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 23 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 27.47. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 23 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 -175.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 8 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 22 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -120.129 at 7,333.019. Volume was 16% above average (neutral) and Bollinger Bands were 53% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 7,601.28 7,858.92 7,521.37
Volatility: 17 19 26
Volume: 560,693,632 540,774,272 585,862,080
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.
NASDAQ COMPOSITE is currently 2.5% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of .IXIC (mildly bearish). Our trend forecasting oscillators are currently bearish on .IXIC and have had this outlook for the last 16 periods. Our momentum oscillator is currently indicating that .IXIC is currently in an oversold condition.
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