Market technician Dave Chojnacki of StreetOne Technical Analysis wraps up the trading week with a deep dive into the important technical indicators for the major U.S. averages.
Equities opened higher on Thursday as we received decent economic numbers. The CPI came slightly higher than expected and the Unemployment Claims were lower once again. Techs were helping to move the averages higher, and in doing so pushed the NASDAQ 100 (NDX) to new closing and intraday highs. The major indices moved higher throughout the session and ended near their highs of the day. The Healthcare Sector performed well in the session. By the final bell, the Dow Jones Industrial Average (Dow) and S&P 500 (SPX) registered significant gains, with the NDX the strongest index on the day. The 10YR was slightly higher and finished at 2.85%.
At the close on Thursday, the Dow added 0.9%, the SPX gained 0.87%, and the NDX moved up 1.69%. Breadth was positive, 1.5 to 1, on below average volume. ROC(10)’s advanced in the session, with all three major indices continuing in positive territory. RSI’s moved higher, with the NDX back in the lead at 64.9. The SPX finished at 62.1 and the Dow at 57.4. All three MACD’s remain above signal. The ARMS index ended the day at 0.91, a slightly bullish reading.
Tech stocks, especially the FANG, had a good day after some recent weakness. The one exception was NFLX, which was down over 12% in the session. The Techs lifted the NDX to new highs, closing at 7366 and an intraday high of 7368. It remains comfortably above near term critical support of its 20D-SMA(7172).
The Dow closed at 24924, remaining positive for the year. It remains just below the 50% retrace level of 25074. The Dow holds above its 50D-SMA of 24674 and its 20D-SMA of 24570. The SPX ended at 2798, and traded as high as 2799. It continues to hold above its 20D-SMA of 2751. The VIX fell 7.7% to 12.58.
Near term support for the NDX is at 7350 and 7300. Near term resistance is at 7400 and 7450. Near term support for the SPX is at 2788 and 2751. Near term critical resistance is at 2800 and 2812.
Europe is pointing higher in early trade, while US Futures are slightly lower in the premarket. Major ecnomic reports on tap today include Import Prices at 8:30am and Consumer Sentiment at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF (DIA) rose $0.10 (+0.04%) in premarket trading Friday. Year-to-date, DIA has gained 1.61%, versus a 5.11% 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 #3 of 81 ETFs in the Large Cap Value ETFs category.