Summary:
Thursday saw stocks advance as Facebook Stock rose over 9% on exceptional earnings. The tech sector led the rally on Thursday. Let’s review the technical indicators from today to see their projections for stocks on Friday Apr 27.
Closing Statistics from Thu Apr 26 2018
The S&P rose 27.54 points to 2666.94 gaining 1.04%
The NASDAQ Composite rose 114.94 points to 7118.68 gaining 1.64% for the best rally of all 3 indexes.
The Dow Jones Industrial Average rose 238.51 points to 24,322.34 gaining 0.99%
Stock Market Outlook Chart Comments At The Close on Thu Apr 26 2018
The chart is more bullish at the close on Thursday. The index bounced off the 21 day moving average and closed just below the 100 day.
The index is still trading below the 50 and the 100 day moving averages and both of those averages are still falling, but the index looks steady enough to move higher on Friday and close above the 100 day moving average.
The closing candlestick on Thursday was bullish for Friday.
The 200 day moving average is still rising. The 50 day moving average is still leading the market but the 21 day moving average is starting to turn higher which is a good sign for Friday.
The Bollinger Bands Squeeze is continuing to develop and it still looks like it will probably send stocks lower.
Stock Market Outlook: Technical Indicators Review:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and rising.
MACD Histogram: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9. MACD (Moving Averages Convergence / Divergence) issued a buy signal on Apr 11. The buy signal strengthened on Thursday.
Ultimate Oscillator: The Ultimate Oscillator settings are: Period 1 is 5, Period 2 is 10, Period 3 is 15, Factor 1 is 4, Factor 2 is 2 and Factor 3 is 1. These are not the default settings but are the settings I use with the S&P 500 chart set for 1 to 3 months. The Ultimate Oscillator signal is negative but rising.
Slow Stochastic: For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic tries to predict the market direction further out than just one day. The Slow Stochastic has an up signal for Thursday.
Relative Strength Index: The relative strength index is set for a period of 5 which gives it 5 days of market movement to monitor. It is often the first indicator to show an overbought or oversold signal. The RSI signal is rising.
Rate of Change: Rate Of Change is set for a 21 period. This indicator looks back 21 days and compares price action from the past to the present. With the Rate Of Change, prices are rising when signals are positive. Conversely, prices are falling when signals are negative. As an advance rises the Rate Of Change signal should also rise higher, otherwise the rally is suspect. A decline should see the Rate Of Change fall into negative signals. The more negative the signals the stronger the decline. The rate of change is also rising.
Support Levels To Be Aware Of:
2745 to 2750 was light support
2710 was light support.
2700 is support.
2675 is light support.
2650 is light support and 2620 is also light support.
2600 is good support.
There is good support at the 2550 level from where the market bounced back from the recent correction on Feb 9.
The S&P has light support at 2480. It also has light support at 2450 and good support at 2425. Below that there is some support at 2400, 2380, 2350. 2300 has the most support at present but would represent a full correction as a drop to this level would be 20% and just 5% away from a potential bear market signal.
Stock Market Outlook for Tomorrow – Fri Apr 27 2018
For Friday the technical indicators have done an “about-face”. They are now pushing higher and almost all have readings strong enough to suggest the index will move higher on Friday.
The movement on Thursday was better than Wednesday and more bullish. Thursday’s close indicates there are buyers lurking who have waited for a rally to get underway.
Friday will see weakness in the morning but then stocks should move higher into the afternoon and the close. Dips will once again be used for setting up trades as investors prefer to buy in weakness and sell into strength.
Next week we should see the markets pullback from the present rally.
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