Chart Advisor

ChartAdvisor March 20, 2016 (SPY, DIA)
By Anthony Jerdine |March 20, 2016

The U.S. markets moved higher over the past week, as of Thursday’s close. Although the economy continued to recover in many ways, the Federal Reserve opted to hold off on raising interest rates during its March meeting this week. The stock market cheered the decision and sent stocks sharply higher after Wednesday’s decision, while easing concerns over China and ongoing easing abroad helped the rally.

International markets were mixed over the past week, as of Thursday’s U.S. close. Japan’s Nikkei 225 fell 2.8%; Germany’s DAX 30 rose 0.6%; and, Britain’s FTSE 100 rose 0.8%. In Europe, the euro moved higher after inflation expectations moved higher following the European Central Bank ‘s increased easing efforts. In Asia, Japanese stocks moved lower as the yen picked up steam, despite the U.S. Fed’s bullish decision-making.

The S&P 500 SPDR (ARCA: SPY) rose 1% over the past week, as of Thursday’s close. After moving past its 200-day moving average at 200.64, the index reached a significant upper trend line resistance level. Traders should watch for a breakout to R2 resistance at around 206.03 or a move lower back to its R1 resistance at around 199.80. Looking at technical indicators, the RSI appears overbought at 68.17, but the MACD remains in a bullish uptrend since mid-February.

SPY Chart

The Dow Jones Industrial Average SPDR (ARCA: DIA) rose 1.55% over the past week, as of Thursday’s close. After breaking out from its R1 resistance at 170.38, the index is nearing its upper trend line and R2 resistance at around 175.80. Traders should watch for a breakout to new highs or a breakdown back towards its R1 support. Looking at technical indicators, the RSI appears quite overbought at 71.61, but the MACD remains in a bullish uptrend.

DIA Chart

The PowerShares QQQ Trust (NASDAQ: QQQ) rose 0.97% over the past week, as of Thursday’s close. After breaking out from its R1 resistance, the index is trading nearby its 200-day moving average at around 107.47. Traders should watch for a breakout to R2 resistance at 110.67 or a move lower to re-test its R1 support. Looking at technical indicators, the RSI appears a bit lofty with a reading of 63.51, although the MACD remains in a bullish uptrend.

QQQ Chart

The iShares Russell 2000 Index ETF (ARCA: IWM) rose 0.4% over the past week, as of Thursday’s close. After breaking out from its trend line resistance earlier this month, the index has traded more or less sideways in choppy trading. Traders should watch for a move toward its R2 resistance at 110.52 or a move lower to re-test its trend line support levels. Looking at technical indicators, the RSI appears a little lofty at 61.83, while the MACD may be losing some of its bullish momentum.

IWM Chart
The major indexes moved higher over the past week, as of Thursday’s close, but they all appear to be relatively overbought after the rally. Next week, traders will be watching if these key resistance levels hold or could take profits off the table. They will also be watching a number of key economic indicators, including crude inventories on March 23, unemployment on March 24, and a final GDP reading on March 25 for any signs of strength or weakness in the economy.

Charts courtesy of StockCharts.com.

 

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