Friday, June 20, 2014

NASDAQ remains poised for breakout or consolidation

NASDAQ did consolidate a little on Thursday, but managed to bounce back from stronger dip in the middle of the day. This did not amount to any real consolidation. The good news is that even with the slight dip on Thursday, NASDAQ has now closed above the March peak for two days in a row. Now the question is how long it can extend that streak and whether it can score a more convincing breakout from this level. Volatility is still to be expected, along with the possibility of some big down days if the flow of money into stocks weakens in any way on a daily basis even if the money flows persist on a longer-term basis.
 
Once again it is a Friday, when short-term speculators are prone to close out positions ahead of a weekend when anything can happen. Iraq is still simmering (as is Ukraine), but not in a way that would mess with the relentless incremental improvement of the domestic U.S. economy.
 
It will be interesting to see how the market reacts to Oracle's (ORCL) mediocre quarterly report. Sure, some analysts were disappointed, but it all seemed par for the course to me. Oracle isn't on my buy list of stocks, so I'm not exactly anxious to buy it on a dip, but if the dip is big enough, the stock will be more attractive. If anything, this kind of stock action is more symptomatic of hedge funds desperate to find some fertile ground for short-selling since the overall market is heading against the interests of the bearish speculators.
 
-- Jack Krupansky

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