NASDAQ Composite (.IXIC) less than 2% shy of exiting from a bear market

NASDAQ Composite (.IXIC) less than 2% shy of exiting from a bear market

NASDAQ Composite (.IXIC) less than 2% shy of exiting from a bear market

Don’t look now, but the Nasdaq Composite Index is poised to make a decidedly upbeat turn for the bulls.

The stock-market benchmark, often employed as a proxy for the health of technology and internet-related stocks, on Dec. 21 closed more than 20% below its all-time high set on Aug. 21, meeting the widely accepted definition of a bear market. After continuing its fall to mark closing low for the selloff of 6,192.92 on Dec. 24, the index has punched higher and now stands 18.2% above its Christmas Eve nadir.

A finish at or above 7,431.50 for the Nasdaq COMP, +1.15%  would mark a rise of 20% from its recent low and — at least by one widely used definition — an exit from bear-market territory.

The definitions are arbitrary, however. Some traders, for example, argue that an asset only exits a bear market when it establishes a new high above its most recent peak. For the Nasdaq, that recent peak would be its record close at 8,109.69 on Aug. 29. At its December low, the Nasdaq was down 23.6% from its all-time high.

Trading in technology-related shares had been at the heart of the prosperity of the broader market in 2017 and much of 2018 because many of those companies can influence the overall market by dint of their market capitalization.

Strategists also said declines in shares of those companies, and the broader Nasdaq, meant that the stock market lacked leadership or a sector sufficiently influential to take it to fresh highs.

So far this year, however, shares of some of those embattled companies have outperformed the stock market by a wide margin. Facebook is up 28% so far this year, while Netflix has gained 31%, among the best performers in the FAANG cohort.

The Nasdaq, meanwhile, has gained 10.5% so far in 2019, while the S&P 500 index SPX, +0.68% has gained 8.3%, and the Dow Jones Industrial Average DJIA, +0.70% has climbed 7.5%. (The Dow and S&P 500 exited correction territory on Jan. 10, usually defined as a decline of at least 10% from a recent peak. The pair of indexes never fell the requisite 20% to enter bear market.)

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 7,721.71.

The projected lower bound is: 6,986.13.

The projected closing price is: 7,353.92.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 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 93.3339. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 64.18. 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 26 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 158.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 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 22 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 83.668 at 7,347.536. Volume was 20% below average (neutral) and Bollinger Bands were 31% narrower than normal.

Open High Low Close Volume___
7,266.2777,348.2327,261.0717,347.536 498,427,872

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

Moving Averages: 10-period 50-period 200-period
Close: 7,147.46 6,950.71 7,453.38
Volatility: 23 34 25
Volume: 594,758,656 617,947,072 562,283,712

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 1.4% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 17 periods.

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