|
|
Get Four
|  | FEBRUARY 25, 2005
 PAUL CHERNEY By Paul Cherney Positive Bias for Stocks The Nasdaq and S&P 500 are right at significant resistance levels which, if exceeded, could trigger buying Volume is a little questionable right now because the higher prices are not attracting more and more people (volume) to the party. But right now, the prices are rising, not falling, and the volume might catch up. These markets probably need a bullish headline to propel prices signficantly higher. But both the Nasdaq composite index and the S&P 500 index are right at significant resistance levels, which, if exceeded, could trigger a small but lively wave of buying that lasts for a couple of trading days. End of day momentum measures are neutral, with a positive bias. These are not strong readings, but they have a positive bias, not a negative one. Immediate resistance for the Nasdaq is substantial (many days) at 2,068-2,111.43, with a focus at 2,078-2,092 (revised from Thursday's end of day comment). One of the big problems with the Nasdaq's attempts to move higher earlier in February was that while prices had moved higher, there was no technical evidence of a stampede of aggressive buyers. The current short-term lift might suffer the same fate (failure to follow through) so, I will need to see a day or two when up volume swamps down volume to suggest that this lift is something more than just an energetic lift fueled by short-covering and short-term momentum players. Bigger volume would increase the chances that investors, whose time horizons are greater than "intraday" or just "a few trading days," have taken an interest in putting money to work on the long side. For the S&P 500, immediate resistance is 1,212-1,217.90. Resistances are stacked and overlapped at 1,215-1,226.27, making the 1,215-1,217.90 area a focus of resistance. The S&P 500 has immediate support at 1,206-1,197. Next support is 1,190-1,184.16. If there is a retracement that undercuts 1,184.16 that would be a big negative and I would expect follow-through lower. S&P 500 1,184.16 was the low and close on Tuesday, Feb. 22. On the daily charts there is S&P 500 support at 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. The Nasdaq has immediate support at 2,055-2,036, with thick support at 2,047-2,036. A move below this level would be a short-term negative. If there were a move below 2,023.00 it would be a negative, too. The 30-day exponential moving average of the VXO was 12.11 near the close of trading on Friday. VXO prints above this level would probably coincide with negative price action in equities. Anytime supports are undercut they convert to resistance until broken. Anytime resistances are exceeded, they convert to supports until proven otherwise.  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
