The NASDAQ futures are sharply higher in pre-market trade as technology stocks got good news yesterday in the form of good earnings from Intel and Yahoo. Yesterday’s chart pattern for the NASDAQ gave a good “heads up’ to expect this movement.
The NASDAQ had a tight trading range yesterday. It was the smallest range of the previous four sessions, nearly an inside day, and a doji. In addition, yesterday’s close was nearly in the midpoint of the recent triangle formed on the chart. This told us to expect a breakout move today. Momentum (the bottom panel of the chart) had dropped to a recent low, which is an indication to expect a rally. And a rally we got! Thus far, the Naz has broken resistance at the upper trendline (around 2193), with next objectives of Monday’s high at 2204 then the contract high of 2214. The one caveat to the day is the potential for a bearish reversal as the market gaps higher on the open-a potential Larry Williams “oops” trade”.
