Friday will be a strong up day for the bulls

Editor’s note: this column was originally published on Capital Essence’s CEM News. It’s being republished as a bonus for the loyal readers. For more information about subscribing to CEM News, please click here.

 

Good Morning. This is Capital Essence’s “Market Outlook” (the technical analysis of financial markets) for Friday April 18, 2008.

Stocks stage a late comeback Thursday with strength in financial and select technology shares helping the Dow erased early losses and closed slightly higher, up about 0.01%. Though do not let the flat tape fool you, today gain is pretty decent considering a massive gain of more than 250 points in previous session. It’s bullish and suggesting that the “sell the rally” morality, which was the case in the past couple of months, had been broken. As a matter of fact, today trading session is very consistent to the “bullish” outlook that we’ve offered in the previous Market Outlook.

Merrill Lynch & Co Inc [MER] was one of the most influential stocks on Wednesday. The firm reported a loss of $2.20 per share, which fell $0.21 short of the consensus earnings estimate. It also announced asset backed security write-downs of $1.5 billion and an additional $3.0 billion in write-downs related to financial guarantees. Despite the announcement from Merrill, brokers and investment banks closed significantly higher with Lehman Brothers Holdings Inc [LEH] up 5%, Citigroup [C], Morgan Stanley [MS] and Goldman Sachs Group Inc [GS] up 2-3%. The KBW bank index gained 1.67% as a result.

bkx_20080417

Chart 1.1 – KBW bank index (daily).

As you can see, the sector moved higher after the tested of key support around the 74 level was met with an aggressive wave of buying. In fact, the action had confirmed the validity of the “oversold rebound” scenario that we’ve traced out in the April 15 Market Outlook when we wrote that: “Monday’s ugly decline had pushed prices into the area of key support at March low, about 74…the medium-term relative strength index indicator, or RSI, is fast approaching the oversold level, it wouldn’t surprise us to see some sort of consolidation around current level.

Technically speaking, while recent trading action is pretty encouraging, it’s simply a short-term oversold relieve. With that said, the bulls will not have any cases unless they manage to take out key resistance at the area of the six-month falling trend-line, now at 88. This, if hurdle and sustained, will have the potential to push prices into the area of February’s high, about 96.51. Critical support is at the area of March’s low, about 73.22.

Speaking of earning rebound, shares of Google Inc [GOOG] soared more than 15% in extended-hours trading after the giant search engine reported sales and earnings that topped forecasts. The NASDAQ 100 is trading well over a full percentage point higher after hours, and the other broad indexes are up as well.

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Chart 1.2 – NASDAQ Composite index (daily).

More likely than not, Friday will be a strong day for tech stocks. In fact, the NASDAQ seemed to be hammering out a nice bottoming pattern (see chart). Today’s MACD indicator bullish cross only strengthens the bull case – the MACD had not only crossed above its signal line but also trending above the zero line and hence, confirmed the bullish trend. The best case scenario would be an upward push to the area of February’s high, about 2419.23. This, if hurdle and sustained, will have the potential to push prices into resistance at the area of the six-month falling trend-line – though this is not expected tomorrow.

Optimism surrounding financial stocks had helped to push the board market higher with the S&P 500 index gained about 0.06%.

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Chart 1.3 – S&P 500 index (daily).

So far so good, the index seems to be ready for a test of key resistance around the 1400 level. In addition, the MACD indicator, which is trending above the zero line, crossed above its signal line today and hence confirms the bull case. Right now the most obvious level to watch is the April 07th high at 1386.74. This, if hurdle and sustained, will trigger all sorts of stops and has the power to fuel a run into the area of November’s low at 1406.10. At this juncture, only a sustain decline below Tuesday’s low at 1324.35 can wreck the short-term bullish outlook.

In summary: unless there is a headline that everyone recognizes as bearish, Friday will be a strong up day for the bulls.

 

Until next time, good luck.
(By: Michelle Mai for Capital Essence)


Note: Michelle Mai writes technical analysis for Capital Essence and is the editor of Capital Essence’s “Market Outlook” newsletter. To receive the daily edition, please subscribe. It’s now available at a monthly rate.

 

今日將大漲

Editor’s note: this column was originally published on Capital Essence’s CEM News. It’s being republished as a bonus for the loyal readers. For more information about subscribing to CEM News, please click here.

 

這是Capital Essence對2008年4月18日(週五)的市場技術分析。

週四大盤基本平收,金融股和個別科技股的動能帶動大盤收復失地,最後小幅高收,漲幅約0.01%。平收的結果不算特別理想,不過考慮到前一個交易日超過250點的漲幅,昨天微幅上揚已經不錯了。這一走勢是看漲的,意味著過去幾個月來投資者“逢高出貨”的心理定勢被打破。事實上,昨天的走勢同我們在昨天的市場前瞻中提出的“看漲”判斷十分吻合。

昨天對大盤影響最大的股票之一是美林(MER)。公司昨天公佈每股虧損2.20美元,虧損額高於分析師平均預測值0.21美元。公司同樣公佈了 15億美元的資產支持證券減記和金融擔保方面的30億美元減記。儘管美林業績不佳,但是券商和投行股均大幅上漲,雷曼(LEH)上漲5%,花旗(C)、摩根(MS)和高盛(GS)漲幅在2%到3%之間。結果KBW銀行指數高收1.67%。

bkx_20080417

圖1.1 KBW銀行指數(日線圖)

從圖上我們可以看到,銀行板塊在測試74美元的關鍵支撐後迎來強勁買盤,連續3個交易日大幅走高。事實上,這一走勢同我們在4月15日的市場前瞻中提出的“超賣反彈”判斷非常吻合,我們當時提到:“週一的重跌將指數打壓至3月低點的關鍵支撐位附近,大約74點……中期相對強弱指標(RSI)快速接近超賣區域,因此接下來在目前位置出現一定的整理行情是不足為奇的。”

從技術上講,儘管銀行指數最近走勢激動人心,但估計僅是一波短期的超賣行情。由此看來,除非指數成功突破6個月下降趨勢線的重大阻力位(目前在 88點),多頭面臨的機會不大。不過一旦指數堅定站上該趨勢線,下一個可能的位置將是2月高點區域,大約96.51點。關鍵支撐位在3月低點區域,大約 73.22點。

昨天搜索引擎巨頭谷歌(GOOG)公佈銷售和利潤數字超出預期,其股票在盤後交易中飆漲15%以上。盤後交易中納斯達克100和其他大盤指數漲幅均遠超1個百分點。

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圖1.2 納斯達克綜合指數(日線圖)

今天很可能是科技股強勢沖高的一個交易日。事實上,納指在圖形上似乎已經形成一個明顯底部。另外,昨天MACD指標交叉至信號線上方、同時低於零線,指標出現金叉同樣支持指數的走高。我們預計納指最有可能的走勢便是上功至2月高點區域,大約2419.23點。如果這一阻力被堅定突破,下一步將有可能向6個月下降趨勢線的關鍵阻力位發起衝擊,不過這不會在今天發生。

市場對金融股的樂觀情緒也推高了大盤,標普500指數上漲約0.06%。

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圖1.3 標普500指數(日線圖)

標普目前走勢不錯,似乎已經準備好向1400點附近的關鍵阻力位作出測試。另外標普的MACD指標在零線上方交叉至信號線之上,這一金叉形態也支持看漲的判斷。目前最應該關注的點位是4月7日高點的阻力,大約1386.74點。如果標普能夠堅定站上這一位置,將觸發各種止損,激發的動能把指數帶向11月低點區域,大約1406.10點。在當前形勢下,指數只有跌破週二低點才能逆轉短期看漲的局面,大約1324.35。

總結:除非有大的利空消息出現,週五將是一個鐵定的上漲交易日。

 

(本文作者:Michelle Mai)


﹕Michelle Mai為Capital Essence(錢途集團)撰寫技術分析﹐並為包括市場趨勢在內的數份金融市場投資通訊的首席市場策略師。如欲每日盤前收到更多最新分析, 敬請訂閱