Monday, November 27, 2006

NASDAQ Technical Picture - Profit Taking was Overdue

The bulls, myself included, have had a nice run lately, and now its time for a healthy dose of profit taking. The markets and most stocks on my radar finished the session on their lows, so I expect that we are in for more selling tomorrow. Wednesday's hanging man foreshadowed a correction but who was paying attention. All tech sectors participated in the slide paced by networking, hardware, and disk drives. The NASDAQ was the hardest hit of the majors, not surprisingly as it led the way up, it will also lead down. However, this is a long overdue corrective pullback to make room for the Christmas rally ;).

Tomorrow's economic calendar includes durable orders at 8:30 EST, followed by Consumer confidence and existing home sales at 10:00.

Below is a 60 minute view of the NASDAQ with key support/resistance levels. Also, look for divergence of the RSI and MACD ahead of a potential reversal (bounce).

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