Market Analysis: Bulls Gain Momentum as Buying Pressure Keeps Indices Afloat
Yesterday’s economic data led to a significant drop in indices at the open, but buyers quickly stepped in to reverse the trend. The bullish momentum continued throughout the day, resulting in large bullish candlesticks that provide a positive outlook for the rest of the week.
The Nasdaq responded well to Monday’s bullish harami pattern, avoiding a dip below previous lows and nullifying a bearish candlestick from Friday. However, it faces resistance from the convergence of 20-day and 50-day moving averages. Technical indicators suggest a new bullish trend, with stochastics returning above the mid-line and a ‘buy’ trigger in On-Balance-Volume.
On the other hand, the S&P struggled to break through August’s price resistance level, despite a strong performance. While another significant upside is unlikely in the short term, holding above yesterday’s close could set the index up for a challenge to all-time highs. Technical signals remain bullish, with On-Balance-Volume showing a ‘buy’ signal and stochastics indicating momentum.
Overall, today’s market is expected to consolidate, with indices likely to hold steady or retest yesterday’s levels. If the bulls can maintain control and prevent a significant pullback, we could see a push towards new highs in the coming weeks.