Nasdaq rebounds as fears fade

Technical Analysis

Author: Greg Michalowski | nasdaq

Yesterday's tumble stalls ahead of trend line support.

We have seen this story before.  A political or geopolitical event sends stocks lower, only to rebound.  

Yesterday, the tech heavy Nasdaq took it on the chin. The price tumbled from a close of ov 6352 on Wednesday, to a close of 6216 yesterday. Technically, the price moved below the 50 day MA at 6271.37.  The fall took the price toward the next target at trend line at 6203. The low reached 6214. 

Today that trend line comes in a little higher at 6208. The low today reached 6216.  The price is staying above the trend line. 

Now the index is not all out of the woods. The 50 day MA is still above at 6271.16. The high today has reached 6257.842.  Stay below is more bearish. Move above and all fears fade further away. 

Looking at the S&P index, it too fell below the 50 day MA yesterday but fell short of its next correction target at the lower trend line. The correction higher moved up to retest the 50 day MA but has so far stayed below it (it is at 2448.28. The high has reached 2448.09).  Like the Nasdaq index,  a move back above the 50 day MA takes some of the selling pressure off the index and could turn the beat back around. 

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