MARKET COMMENTARY

Alright, we have a rebound. And I like the magnitude of the rise as it had reduced the tension built up over an extended period of bearish push. Given a number of potential positive news to be announced on Wednesday and on Thursday, we can expect another round of Bull Run. Be careful though, it will not be a smooth run. Many traders are looking for this opportunity to unload their stocks. Profit taking activities may create big whipsaws.

I have marked a resistance line in the Dow chart. Though this may not be a strong resistance, it presents an identifiable area of a possible reversal target. Depending on the sentiment, the 20-day moving average is also a resistance area. Just as happened before, the Dow may reverse right here after making a shot to get to the 9500 resistance line. If this happens on Wednesday, we will have seen the end of the bullish rebound and Thursday will be the day for the next bearish wave. I am going ahead of myself. Let’s watch what develops from here.

USO is weak. The breaking of the down trend is slim, it seems.

DJIA Daily Chart

The Russell’s momentum is lacking. It may not even be able to break the down trend line to reach the resistance line of 550. This index is more bearish than I thought.

RUT Daily Chart

The Nasdaq is looking at breaking both the down trend line and the 20-day moving average. If so, we may see the index to hit first resistance line at 1350. The next resistance line is around 1480.

NDX Daily Chart 

STOCKS TO WATCH:

NA

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