Last week, we focused on the weekly chart of the NASDAQ 100 Index.
We discussed the potential neckline, which happened to coincide with the 200-day moving average.
Let's take a closer look at the [$NDX.X] by viewing the daily chart. We note that at the March lows bounced off the 200-day SMA and over the past few days, price action has been on the lower end of the congestion area previously marked out, with buyers and sellers battling it out at the 200-day SMA again.
The CBOE equity put/call ratio has risen over the past four days (0.790, 0.874, 0.923) to a high of 0.941 today. Readings near one are often found at short-term panic bottoms, and it was not a surprise to see the sort of violent high-volume spike reversal materialize in the last two hours of trading.
The final analysis is that the [$NDX.X] is still inside a trading range as marked. If that bounce is weak, it will burn out after a few days or less, and then we'll see if the sellers go for the neckline below. /Teresa
04.05.12 20:28 #