Courtesy of Declan.
In day when Alibaba took the headlines, it was left to the Russell 2000 and Semiconductor Index to warn of potential change.
The Russell 2000 experienced a large bearish engulfing pattern, although within the boundaries of the declining channel. There was an undercut of the 200-day MA, which will need to be watched on Monday. Shorts could get aggressive with a stop above 1,164 (and/or declining channel line).
The semiconductor index also experienced a bearish engulfing pattern, which doubled as a ‘bull trap’. This is a decent short side opportunity with a stop above 660. Technicals are clinging to the bull side, so watch for a bullish reaction on Monday.
The S&P experienced huge volume trading on Friday, but there was little net change on Thursday’s close. Given the volume, it’s hard to look past a retest of 1,987, but it’s going to take more than Friday’s selling to hand market control over to bears.
The Nasdaq didn’t finish with a bearish engulfing pattern, but did with bearish cloud cover. Friday’s action keep things inside the range, and bulls should wait for a break of 4,601 to trigger a new breakout.
For Monday, bears have a chance to generate some follow through. However, stops need to be kept tight. Even a strong upside gap on Monday might be enough to nix the short side play.
—
Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.
