Stock Markets Analysis & Opinion

Nasdaq Stuck in Trading Range as Traders Watch for Potential Bounce


Stuck is a word we have used a lot lately.

Some common synonyms for stuck are jammed, trapped, put, pushed, and caught.

Nasdaq is stuck, jammed, or whichever word one wishes to use.

NASDAQ-Daily Chart

And that’s the price.

Traders are also trapped and caught, considering that the market breadth is stuck in the middle between healthy and ill.

This particular indicator shows the number of stocks reaching a new 52-week high relative to the number of stocks falling to a new 52-week low.

A degree of finesse is required to read the current high/low ratio. On a short-term basis, we were starting to get to oversold levels in Nasdaq.

The 10-Day moving average (red line on the middle chart) flipped positive, meaning this February decline may be starting to turn up.

Meanwhile, the 21-DMA (black line) is above 50%. When the value of the 21-DMA is above 70%, it is considered bullish and very bullish over 85%.

When it is under 30%, it is considered bearish, and very bearish under 20%.

While Nasdaq got oversold on a shorter-term timeframe, the longer-term bias remains intact as long as the 21-DMA is at or above 50%.

We are watching for a potential powerful bounce in Nasdaq, hence, bringing the price back towards the higher end of the trading range and the 21-DMA closer to 70%.

Please also look at the bottom chart or the actual up/down ratio. Monday, Feb. 27, there were an even number of red and green bars.

In the weeks prior, the stocks going up outpaced the number of stocks going down.

Now, once this market breadth chart updates, should the green bars rise above the red ones, then that is yet another positive sign for growth stocks and Nasdaq.

And, of course, the opposite is true-more red than green means the market could remain stuck.

ETF Summary

  • S&P 500 (NYSE:SPY): 390 support with 405 closest resistance.
  • iShares Russell 2000 ETF (NYSE:IWM): MA support around 184. 190 has to clear.
  • Dow Jones Industrial Average ETF Trust (NYSE:DIA): 326 support 335 resistance.
  • Invesco QQQ Trust (NASDAQ:QQQ): 284 big support 300 resistance.
  • S&P Regional Banking ETF (NYSE:KRE): 65.00 resistance 61 support.
  • VanEck Semiconductor ETF (NASDAQ:SMH): 228 support 240 pivotal 248 key resistance.
  • iShares Transportation Average ETF (NYSE:IYT): 235 resistance as the best Mod Fam performer and 228 support.
  • iShares Biotechnology ETF (NASDAQ:IBB): 125-130 new range.
  • S&P Retail ETF (NYSE:XRT): 66-68 huge area to hold if the market still has legs.


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