The new trading week kicked off on a very positive note on Monday, with sizable gains across the board for U.S. stocks. Technical analyst Dave Chojnacki of Street One Financial recaps the action gives investors and traders an important update on the key technical levels for the major averages.
The market moved higher right from the opening gate on Monday and stayed strong through the morning hours. This time, the Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) were the stronger indices, as the Nasdaq 100 held up the rear.
Through the PM hours, the major averages moved mostly sideways, and a last hour move to the upside left the NDX and SPX at new highs. The rally was widespread, as most sectors finished in the black. The volume was below average, but better than the last few Mondays.
At the close, the DJIA was up 0.4%, the SPX added 0.48%, and the NDX gained 0.3%. Breadth was positive, 3 to 1, on below average volume. ROC(10)’s were mixed, with the DJIA and SPX advancing and the NDX declining. The DJIA crossed back into positive territory, joining the other major indices.
RSI’s were higher, with the NDX continuing to be the strongest index at 80.2. It continues in overbought territory. The DJIA continues with its MACD below signal, while the other major indices remain above. The ARMS index ended the day at 0.83, a bullish reading.
The rally continues, with the NDX and SPX hitting new highs. The NDX closed at 5704 and hit 5706 intraday. The SPX closed at 2402, and rallied to 2404 intra-day. The SPX and DJIA attempted to get out of the narrow range they have been in for the last 15 days. The SPX closed at 20 points above its 20D-SMA (2382). It is comfortably above critical near term support of 2328.
The NDX has put more distance from its 20D-SMA of 5584. Its critical near term support is way below at 5353. The DJIA has yet to break above its March closing high of 21115, but remains 120 points from its 20D-SMA of 20861. The VIX inched up just 0.02 of point to finish at 10.42. It remains extremely low.
Near term support for the NDX is at 5691 and 5675. Near term resistance is at 5725 and 5755. Near term support for the SPX is at 2400 and 2388. Near term resistance is at 2412 and 2425.
Europe is lower in early trade this morning, while U.S. Futures are pointing higher in the premarket. Major economic reports today include Housing Starts at 8:30am and Industrial Production at 9:15am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF rose $0.3 (+0.14%) in premarket trading Tuesday. Year-to-date, DIA has gained 6.29%, versus a 7.50% rise in the benchmark S&P 500 index during the same period.
DIA currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #5 of 75 ETFs in the Large Cap Value ETFs category.