NASDAQ Composite (.IXIC) surge in broad rally

NASDAQ Composite (.IXIC) surge in broad rally

NASDAQ Composite (.IXIC) surge in broad rally

Global equity markets surged on Monday, lifted by talk of more stimulus from China and by a broad rally on Wall Street that overcame a plunge in Boeing shares after one of its newest jets crashed, while U.S. debt yields rose on improved risk appetite.

China’s main bourses clawed back almost half the 4 percent they lost on Friday as the country’s central bank chief pledged billions of dollars of cuts to taxes and fees to shore up an economy growing at its slowest pace in almost three decades.

The rally on Wall Street given the decline in Boeing’s shares was especially impressive, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

“It’s a very strong sign of overall market strength,” James said. “After the weakness in the markets last week, things have gotten a little bit oversold,” he said.

The Dow rebounded after Boeing Co, the index’s best performing component this year, pared steep losses after some airlines grounded the company’s new 737 MAX 8 passenger jet following a second deadly crash of the airliner in five months.

Boeing shares dropped 5.3 percent, paring losses of about 13.5 percent shortly after the open.

The Dow Jones Industrial Average rose 200.64 points, or 0.79 percent, to 25,650.88. The S&P 500 gained 40.23 points, or 1.47 percent, to 2,783.3 and the Nasdaq Composite added 149.92 points, or 2.02 percent, to 7,558.06.

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 7,319.25.

The projected upper bound is: 7,808.59.

The projected lower bound is: 7,347.69.

The projected closing price is: 7,578.14.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 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 7 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 39.4489. This is not an overbought or oversold reading. The last signal was a buy 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 60.81. 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 50 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 4. This is not a topping or bottoming area. The last signal was a buy 0 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 7 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 149.922 at 7,558.064. Volume was 8% below average (neutral) and Bollinger Bands were 60% narrower than normal.

Open High Low Close Volume___
7,442.5627,558.2307,442.3977,558.064 557,760,768

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

Moving Averages: 10-period 50-period 200-period
Close: 7,527.92 7,203.73 7,480.85
Volatility: 16 21 25
Volume: 598,618,496 573,410,432 572,645,312

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 1.0% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 41 periods.

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