Online Stock Trading | NASDAQ Hits Resistance; The Battle at the 200dma is On!

NASDAQ Hits Resistance; The Battle at the 200dma is On!


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A tame inflation report from the government, believe it or not helped stocks push higher throughout the trading session. The NASDAQ was able to take by storm its 200dma however selling ensued late in the trading session pushing the NASDAQ down near intraday lows. Volume swelled on the NASDAQ while NYSE logged lower volume on the day. Leading stocks took a hit as the IBD100 was down more than 1%. Although the index is loaded with oil and gas names its never a great sign when you see a leading index like the IBD100 down on a day like Wednesday.

Bears are going to put up a fight around the 200dma. The move above the 200dma did not trigger any massive short covering. However, if we are able to sustain the 200dma look for shorts to come in and cover helping stock prices move higher. On the flip side, we could face a pullback after a failed attempt at the 200dma for the NASDAQ.

Keep in mind, one day does not turn the tides in the market. We have 4 distribution days in the S&P500 and Dow Jones Industrials average. NYSE has seen 3 distribution days while the NASDAQ as had 2. I will be more concerned to see 1 or 2 more days of distribution regarding the S&P500 and Dow indexes. Five or six distribution days often signals a market turn.

Continue to search for stocks that have broken out or have found support at the 50dma. OTEX, PWRD, VISN all look very nice. RAME for a speculative stock continues to move higher. Look for stocks with strong fundamental growth and strong price consolidation patterns.

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One Response to “NASDAQ Hits Resistance; The Battle at the 200dma is On!”

  1. NASDAQ Hits Resistance; The Battle at the 200dma is On! | Investors Paradise on May 15th, 2008 12:12 pm

    […] A tame inflation report from the government, believe it or not helped stocks push higher throughout the trading session. The NASDAQ was able to take by storm its 200dma however selling ensued late in the trading session pushing the NASDAQ down near intraday lows. Volume swelled on the NASDAQ while NYSE logged lower volume on the day. Leading stocks took a hit as the IBD100 was down more than 1%. Although the index is loaded with oil and gas names its never a great sign when you see a … [visit site to read more] […]

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