Friday, April 11, 2008

NASDAQ 2315 Again

Two months ago I noted that the 2315 level for the NASDAQ Composite Index had figured prominently in several important gaps and served as a critical support and resistance level for the index going back to mid-January.

In range-bound markets – which is what we are in for now until we get a decisive move up or down – these important support and resistance levels end up being revisited on a quite a few occasions and ultimately prove to be an important measuring stick for the strength of subsequent market action.

Looking at the three month chart (with 60 minute bars) below, in the past two months the 2315 level has played an important role in two new gaps, one from the end of February and another at the beginning of April. The end of February gap down served as a ceiling for price action for almost a month, while the April 1st gap up has been the floor for price movements over the course of the past two weeks. Today’s sharp drop tested the gap and the corresponding 2315 level. So far, that test of support has held. As long as 2315 continues to hold, the markets should continue to consolidate and move up from current levels, but should 2315 be breached – and the gap down to 2290 be closed – expect emboldened shorts and panicky longs to put the 2155 low back in to play.

1 comments:

Sara said...

Hercules It also makes it hard for students to get nursing papers at the right time. Rio Linda

DISCLAIMER: "VIX®" is a trademark of Chicago Board Options Exchange, Incorporated. Chicago Board Options Exchange, Incorporated is not affiliated with this website or this website's owner's or operators. CBOE assumes no responsibility for the accuracy or completeness or any other aspect of any content posted on this website by its operator or any third party. All content on this site is provided for informational and entertainment purposes only and is not intended as advice to buy or sell any securities. Stocks are difficult to trade; options are even harder. When it comes to VIX derivatives, don't fall into the trap of thinking that just because you can ride a horse, you can ride an alligator. Please do your own homework and accept full responsibility for any investment decisions you make. No content on this site can be used for commercial purposes without the prior written permission of the author. Copyright © 2007-2023 Bill Luby. All rights reserved.
 
Web Analytics