By Paul Cherney I do not have any major signals of excessively overbought or excessively oversold conditions so these comments are based on chart pattern possibilities.
The price chart pattern of the past 3 trade days can easily lead to a sharp loss in Friday's session. For the past three trade days, the S&P 500 and the Nasdaq have made intraday moves higher which have been met by sellers willing to deliver stock into the marketplace, which has turned prices lower. That suggests to me that there are probably more sellers with more stock to sell and they might run out of patience ahead of the weekend overwhelming buyers and forcing prices lower.
An intraday rebound on Friday is possible, but right now, the one chart pattern I am concerned about is that we are probably going to have to satisfy more sellers than we have over the past three trade days and that means lower prices during the day on Friday are very likely.
The Nasdaq has immediate resistance at 1742-1757 with a focus of resistance at 1742-1748. The next layer of resistance is 1777-1793.73. There is a gap in the price chart which was created by the downside opening on Feb. 19. That gap is 1791.01 to 1801.67.
The Nasdaq has immediate support at 1722-1696. There is a focus of support at 1721-1714 and a test of this area seems likely.
The S&P 500 has well defined intraday support at 1102-1093. The "500" has thick resistance 1116-1139.50 with a focus of resistance at 1124.72-1130.
Paul Cherney will be the guest on BusinessWeek Online's Ask the Analyst video segment on Mar. 5. Got a question for him? Send it to firstname.lastname@example.org Cherney is market analyst for Standard & Poor's