By Dominic Picarda.
The rally in equities remains in fine fettle. The indices’ intraday advances are strong and confident, while the pullbacks are mild and brief. To put another dent in the bears’ case, breadth on the New York Stock Exchange looks to be breaking to a new bull-market high. Previously, it was not confirming the S&P’s latest surge to fresh highs, which was a potential warning sign of internal weakness. My main worries for now are creeping overbullishness among some investors, as well as near-overboughtness on the daily timeframe. However, I do not intend to let these concerns spoil my fun for now.
The S&P has been tracking sideways since early yesterday, which I see as consolidation following its recent gains. The near-term objective is still 1767.5. The index is nowhere near overbought on its fourhourly chart, so there’s clearly scope for this to happen
Support: 1740.7– Resistance: 1807.2
Support: 1723.7 – Resistance: 1797.2
Support: 1695.6 – Resistance: 1782.1
Support: 1687.2– Resistance: 1767.1
DAY: I’d buy a bounce off the 21-fourhourly EMA.
POSITION: Stay long.
Dominic Picarda CFA, CMT writes the Trader column at http://www.investorschronicle.co.uk/comment/the-trader