NASDAQ Composite (.IXIC) major averages rise to these major risky levels it’s time to reduce allocations to stocks to the minimum percentages in your investment guidelines

NASDAQ Composite (.IXIC) major averages rise to these major risky levels it’s time to reduce allocations to stocks to the minimum percentages in your investment guidelines

NASDAQ Composite (.IXIC) major averages rise to these major risky levels it’s time to reduce allocations to stocks to the minimum percentages in your investment guidelines

The S&P 500 set its all-time intraday high of 3,066.95 as November begins with its quarterly and monthly risky levels at 3,076.9 and 3,089.5, respectively.

The Nasdaq Composite set its all-time intraday high of 8,386.75 on Friday with its monthly and quarterly risky levels at 8,469 and 8,591, respectively.

As the major averages rise to these major risky levels it’s time to reduce allocations to stocks to the minimum percentages in your investment guidelines.

The five major averages are above their semiannual pivots. The Dow, S&P 500, Nasdaq, Dow Transports and Russell 2000 ended last week above semiannual pivots at 27,266, 2,955.6, 7,999, 10.720 and 1,572.85, respectively.  

The Dow, S&P and Nasdaq remain above their annual pivots at 25,819, 2,867.1 and 7,370 Nasdaq, respectively. Transports and Russell 2000 remain below their annual pivots at 10,976 and 1,590.63.

All five major averages have positive weekly charts, so the Dow, S&P and Nasdaq remain in striking distance of setting new all-time intraday highs.

The S&P and Nasdaq are below their November and fourth quarter risky levels at 3,089.5 and 3,076.9, and 8,469 and 8,591, respectively, which are above their all-time intraday highs of 3,066.95 (November 1) and 8,386.75 (November 1). I still view new highs as an opportunity to reduce holdings and raise cash.

Technical Indicators

Overall, the bias in prices is: Upwards.

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

By the way, prices are vulnerable to a correction towards 8,068.05.

The projected upper bound is: 8,627.13.

The projected lower bound is: 8,161.47.

The projected closing price is: 8,394.30.

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 28 white candles and 22 black candles for a net of 6 white candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 9 rising windows in the last 50 candles–this makes the current rising window even more 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 85.7660. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 1 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 65.51. 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 106 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 140.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 10 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 15 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 94.038 at 8,386.398. Volume was 4% below average (neutral) and Bollinger Bands were 17% wider than normal.

Open     High      Low     Close     Volume___
8,335.0528,386.7508,326.5578,386.398 519,423,648
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 8,240.16 8,063.79 7,860.22
Volatility: 12 19 19
Volume: 491,742,688 523,134,592 555,624,640

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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
NASDAQ COMPOSITE is currently 6.7% above 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 volume flowing into and out of .IXIC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 11 periods.

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