NASDAQ Composite (.IXIC) Rally Continues

NASDAQ Composite (.IXIC) Rally Continues

NASDAQ Composite (.IXIC) Rally Continues

The Nasdaq Composite — one of the three major stock indexes of Wall Street — has been performing impressively so far in 2019. On Apr 16, the tech-laden index closed above 8,000 — a key technical threshold — for the first time after Oct 3, 2018.

Positive news on the trade war front and Fed’s dovish monetary stance acted as primary catalysts behind Nasdaq’s rally. Consequently, it will be prudent to invest in Dow stocks with a favorable Zacks Rank.   

Nasdaq Rally Continues

Last year was extremely disappointing for Nasdaq. The index plunged 3.9% recording its worst-ever yearly performance since 2008. However, the Nasdaq started 2019 on a strong note. The tech-heavy index is up an impressive 20.6% year to date. Notably, the index is just 1.4% below its all-time closing high of 8,109.69 on Aug 29, 2018 and needs to move another 1.7% to touch its all-time intraday high recorded on Aug 30, 2018. 

The primary reason for Nasdaq’s turnaround is the rebound of the technology sector. The technology sector suffered a severe setback in 2018. Technology Select Sector SPDR (XLK), one of the 11 sectors of the S&P 500 Index, declined 2.9% last year. However, XLK has jumped 24.6% so far in 2019. 

Overall, the bias in prices is: Upwards.

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

The projected upper bound is: 8,173.06.

The projected lower bound is: 7,842.86.

The projected closing price is: 8,007.96.

Candlesticks

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 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 71.1556. This is not an overbought or oversold reading. The last signal was a sell 0 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 68.99. 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 sell 6 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 106.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 sell 0 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -4.145 at 7,996.080. Volume was 4% below average (neutral) and Bollinger Bands were 20% narrower than normal.

Open High Low Close Volume___
8,044.9698,052.3957,973.3817,996.080 569,990,976

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

Moving Averages: 10-period 50-period 200-period
Close: 7,956.17 7,650.19 7,508.73
Volatility: 7 14 25
Volume: 498,938,432 572,923,520 571,829,952

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 6.5% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 68 periods.


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