Every Thursday, we perform an analysis of three tickers that are looking interesting into the end of the trading week. This week, we take a look at the massive moves across broad markets on Wednesday to see if this move is sustainable or just a dead cat bounce. After multiple days trading outside the lower Bollinger Bands (R), the multi-day selloff came to a very quick halt as some of the indices had their biggest daily gains ever. Continue reading to see the technical setups into the second half of the week!
$SPY: Daily Candle
The entire market had an unbelievable Wednesday with a massive move off the lower Bollinger Band (R) to the upside. The last two times the price finally found a bottom on the lower Band and moved up, the basis moving average was the area tested above. Another very bullish indication for the rest of the week is daily RSI and %R blowing through the weekly indicators. The weekly MACD is also showing signs of a possible curl to the upside as well but this will need to confirm over the next few weeks.
$QQQ: Daily Candle
The Nasdaq ETF looked like a penny stock today with a massive move over 6% and a close near the high of the day. The pattern here is looking similar to SPY with three distinct times the price has traded outside the Bollinger Bands (R) on the channel support trendline. The price did not quite make it to the support trendline this time around but with such a big move outside the Bollinger Band (R) on Monday, this was kind of expected. The daily RSI also blasted through the weekly RSI today showing momentum may be shifting to the upside as shorts cover after over seven days of red candles.
$DIA: Daily Candle
The Dow Jones Industrial Average ETF had a monster of a day here with a textbook move from outside the lower Bollinger Band (R) to test the previous channel support now acting as resistance. After 10 days of red candles in a row, this may turn into a multi-day run as value investors buy the dip and overconfident short-sellers start to cover their positions, especially those heavily leveraged. If this resistance area can break, a test of the Bollinger Band (R) basis moving average would be the next area to watch above. Notice the weekly MACD is attempting to curl here as well with the daily RSI blasting through the weekly RSI today. This daily move through the weekly RSI has signaled larger moves in the past.
Market Update Into October 12th: Semi Stocks Slide