Around noon, the NASDAQ tested its opening range high, but failed to take it out. What followed was a very orderly pullback with very little bounce into the close. Expect more profit taking because this pullback is overdue. Our first area of support is the 200MA and this may hold into the close tomorrow, but will undoubtedly be taken out next week. Today's action resulted in a bearish engulfing pattern, usually a strong reversal signal particularly when positioned at the top of a multi-wave move. The SOX is leading the way down but all tech sectors participated in the afternoon profit taking.
Thursday, September 21, 2006
NASDAQ Technical Picture - Bearish Engulfing Pattern
Around noon, the NASDAQ tested its opening range high, but failed to take it out. What followed was a very orderly pullback with very little bounce into the close. Expect more profit taking because this pullback is overdue. Our first area of support is the 200MA and this may hold into the close tomorrow, but will undoubtedly be taken out next week. Today's action resulted in a bearish engulfing pattern, usually a strong reversal signal particularly when positioned at the top of a multi-wave move. The SOX is leading the way down but all tech sectors participated in the afternoon profit taking.
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