ChartAdvisor for Aug. 15, 2014

By Justin Kuepper | August 15, 2014 AAA

Major U.S. indices moved higher over the past week led by technology stocks. Factory orders were the highest in five months driven by the automotive sector where cars were manufactured at the fastest rate in 14 years. Despite these gains, economists remain concerned over stagnant household incomes that aren’t expected to outpace inflation over the next year. (For related reading, see: 15 Jobs That Have Increased Salary During The Recession.)

International markets followed the U.S. higher over the past week. Japan’s Nikkei 225 rose 3.62%; Britain’s FTSE 100 rose 1.8%; and Germany’s DAX 30 rose 0.92%, as of mid-day trading on Friday afternoon. In Europe, Germany’s economy shrank for the first time in more than a year causing concern. In Asia, concerns have grown over China’s housing market correction and overcapacity in the steel and basic materials sectors.

The SPDR S&P 500 (SPY) ETF rose 1.18%, as of Friday afternoon. After rebounding from S1 support at 191.02, the index moved past its 50-day moving average at 195.54 over the past week. Traders should watch for a breakout from R1 resistance at 197.11 towards it upper trend line or a retracement to its lower trend line support. Looking at technical indicators, the RSI appears neutral at 53.31, but the MACD may have experienced a bullish crossover. (For related reading, see: A Primer on the MACD.)

SPY, neutral RSI, bullish MACD

The SPDR Dow Jones Industrial Average (DIA) ETF rose 0.56%, as of mid-day trading on Friday afternoon. After rebounding from its S1 support at 163.05, the index moved past its pivot point over the past week. Traders should watch for a breakout from its 50-day moving average towards R1 resistance at 168.89 or a move back down to retest its lower support trend line. Looking at technical indicators, the RSI appears neutral but the MACD experienced a bullish crossover. (For related reading, see: Bullish And Bearish MACD Crossovers.)

DIA, neutral RSI, bullish MACD

The PowerShares QQQ (QQQ) ETF rose 2.46%, as of mid-day trading on Friday afternoon. After moving past its pivot point, the index broke out from R1 resistance at 97.31 towards its upper trend line. Traders should watch for a move to R2 resistance at 99.27 or a move back down to retest its lower trend line support. Looking at technical indicators, the RSI appears a bit lofty at 63.93, but the MACD appears to have experienced a bullish crossover.

QQQ, lofty RSI, bullish MACD

The iShares Russell 2000 (IWM) ETF rose 0.82%, as of mid-day trading on Friday afternoon. After breaking out from its 200-day moving average at 113.18, the index moved past its pivot point over the past week. Traders should watch for a breakout from these levels towards R1 resistance at 117.45 or a move back down to retest its 200-day moving average or lower trend line. Looking at technical indicators, the RSI appears neutral but the MACD experienced a bullish crossover.

IWM, neutral RSI, bullish MACD

Summary

The major U.S. indices moved higher over the past week driven by a rebound in the manufacturing sector, although concerns remain over stagnant household incomes. Next week, traders will be watching a number of upcoming events including housing starts and CPI data on Aug. 19, FOMC minutes on Aug. 20, and jobless claims and existing home sales on Aug. 21.

Charts courtesy of StockCharts.com.

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