U.S. Indexes Form Bearish Candlesticks Near Resistance
Declan Fallon | Apr 19, 2023 14:23
Today's action finished with low-level losses. Candlesticks were bearish, but this wasn't surprising, given the tags on resistance. Overall, I'm still bullish on markets, but it may take a little longer before we see resistance breakouts.
The Nasdaq started the day just below 12,250 resistance as it remains inside its mini-handle. On-Balance-Volume remains on a 'sell' trigger, and the index is still underperforming the S&P 500, but other technicals are positive. I would be looking for a breakout over the coming days.
The S&P 500 closed the day with a bearish 'black' candlestick. At the end of a rally, the 'black' candlestick has a higher probability of acting as a reversal, so one must be cautious here because we have a strong possibility of some downside action in the coming days. Technicals are net positive, and the index continues outperforming Russell 2000.
The Russell 2000 continues to be rebuffed by its 200-day MA. Technicals are still mixed, not helped by the MACD below the bullish zero line and stochastics below the 50 mid-line. Each on-balance-volume and the ADX are on the verge of fresh 'sell' triggers. While the long-suffering relative performance against Nasdaq is changing in favor of Small Cap stocks, it hasn't fully reversed.
While I remain positive on the Nasdaq breaking resistance, I find the Russell 2000 problematic. I wouldn't commit to the Nasdaq without the Russell 2000 surpassing its 200-day MA. The S&P is a bit of a "man-in-the-middle" and could go either way, but I don't see it as an index to watch now.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.