Nasdaq Bulls Look to Defend Key Support for a Fresh Rally, Eyeing Higher Lows

Published 10/09/2024, 06:22
US500
-
US2000
-
IWM
-
IXIC
-

Seller remorse after a weekend of retrospection might have accounted for some of yesterday's buying, and while bullish haramis left in indexes might offer reversal opportunities, overhead supply at moving averages will likely prove problematic.

The Nasdaq finished with a bullish harami cross, a more reliable (bullish) reversal candlestick than a standard bullish harami.

The index is close to its 200-day MA, although any hit of this would likely lead to failure given the recency of the last test.

Ideally, it won't get there, and Friday's lows around 16,650s will be enough to act as support and kickstart a new sequence of higher lows.

COMPQ-Daily Chart

The Russell 2000 (IWM) dug in at $207.50 support, established in part by May swing highs. I'm not sure it's a strong level, particularly as it played a little defensive role during the test of the 200-day MA in August.

Yesterday's buying was low on volume and didn't change the net technical picture. From a trade perspective, a close (intraday violation okay) of $207 would see a move to the 200-day MA and likely lower.IWM-Daily Chart

The S&P 500 gapped higher at the open and gained further ground during the trading day.

SPX-Daily Chart

However, it's a long way from the August swing low or 200-day MA, although has the benefit of bullish Stochastics and is a relative performance leader.

The risk:reward is not as attractive in the short term and has merit if it can get back to challenging 5,650s.

Bullish haramis are good reversals, but for them to come into play they typically require opening gaps higher. Certainly, yesterday's lows can't be violated. Watch pre-market for leads.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.