The broader U.S. stock indices are pushing higher today, led once again by the tech-heavy NASDAQ. The index is currently up about 280 points (1.10%) at 25,783, extending its rebound but approaching an important technical crossroads. The next upside targets are its 200-hour moving average at 25,918 and 100-hour moving average at 25,974. Buyers need to reclaim and hold above both of those levels to shift the near-term bias back in their favor.
Last week offered a reminder of how important those resistance levels are. The NASDAQ briefly traded above the hourly moving averages but stalled near a key swing area around 26,310, where sellers stepped back in. The index then fell below both moving averages on Thursday and opened with a bearish gap lower on Friday before beginning the current recovery. Unless buyers can push through the two hourly moving averages, the rally remains more of a corrective bounce within a broader bearish technical structure.
The S&P 500 is in slightly better technical shape. The index has already climbed back above its 200-hour moving average at 7,467.03, but it is now testing the more important 100-hour moving average at 7,513.28. That level proved to be a ceiling on Friday, when buyers briefly pushed above it only to encounter willing sellers that forced the index back lower. Today’s rally brings traders back to the same decision point. A sustained move above the 100-hour moving average would strengthen the bullish case and shift momentum back toward the upside.
Conversely, failure to break and hold above the 100-hour moving average would keep the technical outlook more neutral-to-bearish. A move back below the 200-hour moving average at 7,467.03 would put the focus squarely on the downside once again, with the 7,421.82 swing area becoming the next key support. A break below that level would give sellers greater control.
In the video above, I take a closer look at both the NASDAQ and the S&P 500 from a technical perspective. I also include a bonus review of two semiconductor leaders—Micron and Nvidia.
Last week I highlighted Micron as a stock to watch for support near the bottom of a swing area around $818.67, followed by the 50% retracement below. At Friday’s open, the stock briefly gapped below the $818 level but quickly found buyers and reversed sharply higher—a classic rejection of lower prices. That rebound carried the shares back toward the $900 area, where resistance emerged near the previously broken 38.2% retracement.
Today, Micron gapped higher once again and is currently trading up $67, or 7.76%, at $932.63. The next key upside target comes against its falling 100-hour moving average at $961.62. A move above that level would strengthen the technical picture further and give buyers another important victory.
Nvidia is also showing signs of improving technically, with the stock climbing back above its nearly converged 100-hour and 200-hour moving averages (blue and green lines), both clustered near $203. As long as the price can hold above those key moving averages, the near-term bias tilts back in favor of the buyers. The next upside targets come into a swing area between $212.19 and $214.00, where sellers previously stepped in. On the downside, a move back below the 100- and 200-hour moving averages would shift the focus back toward the 100-day moving average near $199. That level proved to be solid support last week, attracting willing buyers and helping to stabilize the stock. Holding above the hourly moving averages keeps buyers in control, while a break back below them would hand momentum back to the sellers.
This article was written by Greg Michalowski at investinglive.com.
