Tuesday, March 06, 2007

NASDAQ Technical Picture - Oversold Bounce

As discussed in last night's post, we made a case for a bounce based on extreme oversold levels of the McClellan Oscillator, positive divergence on the 60 minute timeframe, and the inverted hammer candlestick which needed confirmation to complete the candlestick reversal pattern.

Well we got a broad based bounce and candlestick reversal confirmation. The only caveat was slightly lower volume. From the chart above we can see that resistance is just 15 points away and I fully expect it to hold on a closing basis tomorrow. From yesterday's low to today's close, the NASDAQ gained 45 points, so we have to be realistic.

Economic calendar: Crude inventories 10:30; Fed Beige Book 2:00; Consumer Credit 3:00.

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