Entering text into the input field will update the search result below

Dow Jones, Nasdaq And S&P500 Technical Outlook

Apr. 30, 2011 5:36 AM ET
lytman02 profile picture
lytman02's Blog
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

I hope everyone had a blessed Holy Week and before we end it, let’s tackle the major indices in the US stock market to provide us a technical outlook on the days ahead.

On the canvass is the chart of the Dow Jones Industrial Average (^DJI), NASDAQ Composite Index (^IXIC) and the S&P500 (^GSPC). For those who do now know, these three indices are the benchmark of the US and global stock market so wherever they go, most stock markets follow. As these three indices move in a similar fashion, when one of them goes down, the other two often succeed and vice versa. Try checking their historical data to see the movement. Anyway, as of the moment, they are all moving on a 2-year uptrend and within the uptrend is an 8-month ascending channel. As we look closer, we even see something better and this is the highlight of my post. I want to emphasize the bullish chart pattern that I spotted recently on these three. Yes it’s a bullish chart pattern! The ^DJI could be forming a 2-month ascending triangle pattern while a possible 2-month symmetrical triangle for ^IXIC and ^GSPC. Whatever triangle they may be, the fact that it’s coming from an uptrend more likely means that its poised for an upside breakout. These indices are already testing the triangle’s resistance. Well actually, the ^IXIC seemed to have already broken out but I’ll only be persuaded if the ^DJI and ^GSPC follow through. If all of them convincingly breakout from the said pattern, we could see the ^DJI hit the 13,000 marker, the ^IXIC at 3,000 and the ^GSPC at 1,400. In case things don’t go well for them, the significant support could be the 8-month ascending channel. If the channel breaks down, the 2-year uptrend will be the next significant support.

Above all, as long as the uptrend remains intact, I’m bullish on these 3 indices even if they don’t breakout from the 2-month triangle pattern. In addition to that, they are currently moving above the 50, 100 and 200-day moving averages and the MACD is at the positive territory which even strengthens the bulls. Since the US stock market is often the benchmark of the global stock markets, if they perform outstandingly, our stock market will most likely too.

More on LaidTrades.com ...

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.