Markets recorded very strong reversals of late morning lows with the Nasdaq erasing a loss of 1.8% to eke out a gain of .1%. Intraday that was a 100 handle move and why we emphasize CLOSING prices so importantly. During the session the benchmark took out a bearish flag pattern but did not finish beneath it negating the move. The S&P 500’s move was even more technically impressive as it put up a bullish outside day CLOSING above its 200 day SMA that it had undercut earlier on Tuesday. The index rose .6%. Interestingly 2 of the 3 top performing sectors today were among the lagging groups which could make this rally a little suspect. Energy and utilities and consumer staples led the way. Some other defensive names displayed some muscle with DPS demonstrating excellent relative strength Monday on a weak tape rising 1.3% finding firm 200 day SMA support. Tuesday it followed through and rose by almost 3%, again on robust volume. Below is the chart we posted in the opening paragraph of our Wednesday 6/27 Game Plan recommending a purchase at the 200 day SMA. On an interesting note some casual diners are starting to pop up on our long radars as gas prices at the pump may begin to lower in value. Names like JACK should be kept on a long watch as it reclaimed its 50 day SMA. The stock looks ready to build the right side of a cup base potentially and notice how it was stopped almost precisely at the round par figure on 3/24-25. Speaking of the round numbers is more advanced in its cup base and its progress was halted at the round 160 handle back on 3/20. Enter above a pivot point of 160.04.
This article requires a Chartsmarter membership. Please click here to join.