Breakout from Handle spring boarding off the 20/50 day EMAs (click to enlarge)
Yesterday’s economic reports all came within expected ranges, some over, some under… so that’s not a problem. Next, we gapped up yesterday, launching off those 20/50 day moving averages, so that’s even better. And we’re building momentum now, with the MACDs on all the major indexes showing a cross over the zero line. Yes! This was a critical move by the Bulls and it was done on pretty good, not utterly fantastic, yet definitely not anemic, volume. When you start a leg up with a gap, that’s a good sign. Now we want to see steady progression through that next level of resistance before taking any significant breather. For the S&P that next obstacle is 1115.
The Nasdaq is in much better shape, as would be expected on a wave three leg up. It’s breaking out of a cup and handle formation, a well recognized bullish pattern. And doing so using the 20/50 day EMA as a spring board. See the chart above.
Our Apple Long call is doing fantastic! We have three huge white candles and the daily charts are completely overbought, evidenced by the RSI, which has plenty of room to grow. The Stochastic can stay overbought for extended periods during a bull run, so we’ll be watching for the time when the RSI catches up with it. Apple finished the day very strong at 208.99 up +4.37 (2.14%). The premarket is down, but that’s to be expected with the near term oscillators getting very overbought. That can be cleared through intra-day action.
With Apple and tech leading the way, we need the financials to cowboy up so that we can clear that 1115 level and make a goo at the top of the trading range 1150. The next level of resistance comes into play at 1132. Apple is currently at it’s next challenge from 209 to 210. Should we push through there our target of 215 will be well within grasp! Don’t get frustrated, as Apple is ahead of the pack, it’s overbought, and this next level is going to be tough.
Tagged as: Cup and Handle