NASDAQ Composite (.IXIC) third-quarter earnings season takes center stage

NASDAQ Composite (.IXIC) third-quarter earnings season takes center stage

NASDAQ Composite (.IXIC) third-quarter earnings season takes center stage

The S&P 500 and Nasdaq index rose on Thursday, boosted by gains in Microsoft and PayPal, but Vice President Mike Pence’s comments on China rekindled worries ahead of trade talks.

Pence accused China of curtailing “rights and liberties” in Hong Kong in a wide-ranging critique of Beijing’s behaviour but also insisted that the United States does not seek confrontation or to “de-couple” from its main economic rival.

Still, the third-quarter earnings season took center stage as investors tried to gauge the fallout from the U.S.-China tariff war on the domestic economy.

Tech giant Microsoft Corp gained 2.3% as its outlook for cloud computing services surpassed analysts’ expectations, while PayPal Holdings Inc PYPL.O rose 8% on a strong full-year earnings forecast.

But the blue-chip Dow Jones index was in the red, dragged down by a 4.2% fall in shares of 3M Co after the industrial conglomerate lowered its full-year profit forecast.

The S&P 500 technology sector traded 1.5% higher, clocking the biggest gain among the 11 major S&P sectors, while the communication services sector slipped as Twitter Inc tumbled about 20% following disappointing quarterly results.

The earnings narrative so far has been fairly positive with over 80% of the 168 S&P 500 companies that have reported results beating profit expectations, according to Refinitiv data.

“When earnings season began the bar was set pretty low and now a host of companies have reported and beaten expectations … But I wouldn’t say we are completely out of the woods,” said Brian Yacktman chief investment officer at YCG Fund in Austin, Texas.

Data on Thursday was mixed as new orders for key U.S.-made capital goods fell more than expected in September, while a private survey showed higher-than-expected factory activity in the month of October.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 8,432.42.

The projected lower bound is: 7,955.65.

The projected closing price is: 8,194.03.

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 26 white candles and 24 black candles for a net of 2 white candles.

A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.

A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend (which appears to be the case with NASDAQ COMPOSITE) it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend it is called a bullish hammer.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

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.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 61.1434. This is not an overbought or oversold reading. The last signal was a sell 4 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 57.90. 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 100 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 87. This is not a topping or bottoming area. The last signal was a sell 4 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 9 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 66.003 at 8,185.796. Volume was 15% below average (neutral) and Bollinger Bands were 8% narrower than normal.

Open     High      Low     Close     Volume___
8,180.0418,187.8398,137.6578,185.796 468,721,280
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 8,119.78 8,019.72 7,821.11
Volatility: 14 19 19
Volume: 476,800,320 520,656,480 555,638,656

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 4.7% 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 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 5 periods.

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