Gap Down, but the Market Shows Resilience
When the market gaps down below the 50 day SMA what is your expectation for what will happen next?
For me, I would look for follow through to the downside. Today however, we saw a decent to strong close and many names acted well. An expectation breaker.
In this article I’ll concisely share my thoughts on today’s action.
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Now let’s dive in ↓
Market Action
QQQ Today we saw a gap down below the KMAs but a decent to strong close right at their level. We remain in a short term downtrend but this is one day of constructive action.
Watch for further upside or a break below today’s lows
The IWO closed alright, but is weaker and below KMAs
Volume
Volume was higher on the NYSE and about the same but slightly lower on the Nasdaq.
Trends ( Based on QQQ) - All Turn Up
Shortest - 5 Day SMA - Down - Below Declining
Short-term - 21 ema - Up - Above Rising
Intermediate term - 50 sma - Mixed- Below Rising
Longterm - 200 sma - Up - Above Rising
Group/Themes Action
Today we saw strong closes from many industries and especially growth stocks acted well. Packaged software stands out.
Here’s a Daily Group Performance chart from TraderLion Private Access:
Key Stocks in Deepvue
NVDA good close but still in a short term downtrend. Found support near the 50 sma
TSLA - Nice close and tightening
DLO not the best close but still in the tight range
DKNG nice pivot breakout
NVO nice move
ZS the cyber security stocks are acting well. OKTA FTNT CRWD
RIVN tight
ABNB nice action
Overall there are a number of names acting well and setting up
Market Thoughts
We saw more fear come in this morning on the gap down and a positive response from the market and stocks. many names are holding up well on this short term pullback and are setting up.
Tonight is a crucial night to make a lists of names acting well that could have nice moves if we continue higher.
However remember that this was just one day, the market still has a bit more to broke and get back above the moving averages.
Continue to manage risk as always!
What are your thoughts on today’s action? (Leave a comment below)
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Cheers!
Richard
Mostly chips and AAPL held us back