|
|
Get Four
|  | FEBRUARY 23, 2005
 PAUL CHERNEY By Paul Cherney The Market Holds Steady Short-term measures have lost downside momentum and the possibility for a one or two-day rebound is real The pattern I expected to see on Wednesday, Feb. 23, did not unfold and stock prices held steady. Right now there is nothing definitive in the short-term measures I use. They have lost downside momentum and the possibility for a one or two-day rebound is real. A rebound that lasts all day Thursday would probably have to see the Nasdaq composite index move above the 2,047 level and the S&P 500 index eclipse 1,198. On a more intermediate term basis, there is still a negative bias in place and I cannot say with any great confidence that downside is over unless there is a bigger improvement measures of accumulation. The intraday price pattern for the Nasdaq on Wednesday did not attract aggressive sellers at the lows and it would only take a move above 2,047 to inject a level of fear in short-sided traders and create a short-squeeze. For Thursday, a decline in oil prices or a rebound in the dollar would create an intraday atmosphere that would promote short-covering. The Nasdaq has immediate resistance at 2,036-2,047. The Nasdaq has had a close under 2,039.72 on Tuesday and this opens the immediate downside risk for a test of the 2,018-2,008 area. At those prices, short-term, on a first-time test basis, short-coverers will probably book profits (buy to cover which could stabilize prices and might attract other short-coverers). The Nasdaq is inside a layer of support at 2,039-2,008. Inside this shelf of support there is a focus of support at 2,036-2,024 and the Nasdaq's intraday low on Wednesday was 2,024.64, so there were buyers not willing to give prices a chance to move lower. If there is a close under 2,008, that would be another step in a downtrend and would increase concerns for a test of the next layer of support: 1,980-1,900. The support in this zone starts to thicken at 1,971-1,947. For the S&P 500, immediate resistance is 1,191.54-1,202.48. The S&P 500 has closed under a critical layer of support at 1,190-1,185.63, I think the chances are high for some small, stairstep movements that have a negative bias as the markets attempt to regain their feet but I would be wrong about this view in the short run if the S&P 500 managed a move above 1,209. On the daily charts there is S&P 500 support 1,184-1,160, inside this support are shelves. The biggest support looks like 1,178-1,163. Next support is 1,142-1,090.  Cherney is chief market analyst for Standard & Poor's All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report. Standard & Poor's Regulatory Disclosure Any advice, analysis, or recommendations contained in articles labeled "Insight from Standard & Poor's" reflect the views of Standard & Poor's, which operates separately from and independently of BusinessWeek Online. It is possible that BWOL may from time to time publish information that is not consistent with advice, analysis, or recommendations that are published by Standard & Poor's. Standard & Poor's and BusinessWeek Online are each units of The McGraw-Hill Companies, Inc.
BW MALL
SPONSORED LINKS
Get BusinessWeek directly on your desktop with our RSS feeds.
Buy a link now! Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
 Copyright 2005, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version
