Market Analysis (09 March’21)

Technology stocks rebounded Tuesday and treated the Nasdaq Composite to its best session in more than four months, a day after the index slid into correction territory. Investors appeared to bargain-hunt, pouncing on stocks that had been beaten down over the past several weeks. Shares of Tesla, Roku and Square all rose by double-digit percentages, while tech’s heavyweights, Apple, Amazon and Facebook each added more than 3%.

S&P500 FUTURES LEVELS

The S&P500 futures rallied today fueled by the tech sector rebound all the way to the 3900 level, which acted as a supply area again (the index struggled with the 3900 resistance several times last week). Hence, for a bull case to play out, the index absolutely needs to close above the 3900 resistance, which will open the door for bulls to retest another important supply area – 3930. Should the index break out, the odds will favor higher prices moving forward.

ES, 1h

Nasdaq — An Inverse Head and Shoulders?

The Nasdaq index might be forming a potential bullish inverse Head and Shoulders pattern. For the pattern to play out, the index needs to move above the 13000 level and consolidate around that level for several trading sessions.

NQ, 1h

TREND ANALYSIS

After today’s price action, all four indices are in an UPTREND on their daily timeframes. Additionally, S&P500, Russell and Dow Jones are also in an UPTREND on the weekly and monthly timeframes.

Nasdaq: Monthly, Weekly and Daily Heikin Ashi charts

S&P500: Monthly, Weekly and Daily Heikin Ashi charts

Russell: Monthly, Weekly and Daily Heikin Ashi charts

Dow Jones: Monthly, Weekly and Daily Heikin Ashi charts

SPX Formed Another Base?

The S&P500 dropped -6% from its all time highs at 3960 to the last Thursday’s low of 3720. The recent pullback formed a potential bullish base (see chart below). Similar patterns have been formed three other times since the March 2020 bottom. If the index can move above the 3930 resistance in the near future, we will most likely see new all time highs in the coming days / weeks.

SPX, daily

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