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NASDAQ And S&P 500 Break Out

By Declan FallonStock MarketsApr 06, 2021 12:24AM ET
www.investing.com/analysis/nasdaq-and-sp-500-break-out-200571418
NASDAQ And S&P 500 Break Out
By Declan Fallon   |  Apr 06, 2021 12:24AM ET
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On Monday, gains for indices were enough to drive new swing high breakouts. There wasn't a whole lot of volume following the Easter holiday, but the intention was clear.

The NASDAQ managed a new closing high which cleared both the late February and March swing highs on the back of a bullish cross in momentum stochastics, and a continued improvement in relative performance to Small Caps.

COMPQ Daily Chart
COMPQ Daily Chart

The S&P also cleared trendline resistance in an acceleration of the bullish trend. There was a bullish cross in On-Balance-Volume to support the ADX and MACD. Momentum is overbought, but not in a way to suggest a stop is in place. 

SPX Daily Chart
SPX Daily Chart

The Russell 2000 (via IWM) was more low key. While it posted a gain it wasn't able to challenge any major price resistance, although there was a bullish cross in stochastic and an acceleration in On-Balance-Volume.

IWM Daily Chart
IWM Daily Chart

In terms of the movers-and-shakers, we have a Semiconductor Index which cleared the February swing high with technicals net bullish and relative performance also at a new swing high.  This strength should help the NASDAQ and NASDAQ 100

SOX Daily Chart
SOX Daily Chart

The rotation away from Small Caps continues, with Large Caps (and Tech, to a lesser degree) benefitting. Large Caps have been steadily improving, but Tech has been in consolidation mode for a couple of months now, and this will likely lead to a more bullish outcome in the latter part of this year. 

Small Caps still have plenty of mean reversion to do, but they remain well above their 200-day MA; in fact, the index is still above the 95% of historic bullish action relative to its 200-day MA going back to 1987; plenty of profits still to take here...

NASDAQ And S&P 500 Break Out
 

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NASDAQ And S&P 500 Break Out

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Blue White
Blue White Apr 06, 2021 12:46AM ET
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Great analyse
 
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