NASDAQ Composite (.IXIC) on the cusp of exiting a bear market
The Nasdaq Composite is on the cusp of exiting a bear market, rebounding nearly 20% from its Christmas Eve low and highlighting the resilience of the technology shares that have long powered the market higher.
The index heavily weights shares of technology firms like Apple Inc., Amazon.com Inc., Google parent Alphabet Inc. and Facebook Inc., which cumulatively lost hundreds of billions of dollars in market value in the final months of 2018.
The rout, many said, was fueled by dimming confidence in the domestic and global economies, then likely exacerbated by machine-run trading that accelerated the declines.
But in recent weeks, rising optimism about U.S.-China trade negotiations and U.S. monetary policy has helped propel stocks across the board higher. And earnings reports from technology behemoths, while mixed, have proved to be better than many investors had feared.
Apple’s revenue and profit slipped as its China sales disappointed, although shares jumped after Chief Executive Tim Cook reassured investors that the company wasn’t taking its “foot off the gas.”
Facebook delivered record profit for the latest quarter, proving its business continued to grow even as it faced backlash from users and regulators. Alphabet posted a jump in quarterly revenue, along with rising costs outside its core online-advertising business.
Those developments have pushed the Nasdaq up more than 19% from its December low—and within 1 percentage point of exiting bear-market territory and kicking off a new bull run.
If the index achieves the feat in the next four days—closing at or above 7431.504—it would mark its second fastest such rebound since its inception in the 1970s, according to Dow Jones Market Data. Despite the recent surge, the index is still down 9.1% from its Aug. 29 high.
Meanwhile, the S&P 500 and Dow Jones Industrial Average, which narrowly avoided entering a bear market, have also surged since Christmas. The indexes are both up more than 16% from their lows.
“To say companies like Amazon, Google or Facebook are now in some way finished or at the end of their growth cycle—I don’t see that. We’re just at the beginning,” said Christopher Rossbach, chief investment officer at private investment office J. Stern & Co., which holds shares of the three companies.
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 7,117.99.
The projected upper bound is: 7,747.23.
The projected lower bound is: 7,019.45.
The projected closing price is: 7,383.34.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white 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 95.1633. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 11 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 64.27. 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 28 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 126.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 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 buy 24 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -26.803 at 7,375.281. Volume was 15% below average (neutral) and Bollinger Bands were 26% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 7,220.59 6,968.64 7,455.35
Volatility: 19 34 25
Volume: 585,094,912 616,604,736 562,943,424
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 1.1% 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 19 periods.
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