Gains Still Likely

The line of least resistance is for higher prices. But some sort of retracement is overdue

By Paul Cherney

The line of least resistance is for higher prices. But some sort of retracement is overdue. When I see an advance which does not garner good volume, (or some other technical condition arises), then I will become concerned about downside, right now I still think the trend is higher.

The Nasdaq ended Friday's session in another test of a focus of resistance in the 2143-2182 area. The next broad layer of resistance is 2184-2354. Inside of this resistance there are ledges of resistance the first one is 2233-2264. Immediate (intraday) support for the Nasdaq is now 2130-2074 and this level could easily be tested in a short-term profit-taking retracement early next week.

The S&P 500 has immediate support 1238-1223 then 1212-1202 then 1193-1158. The index has immediate resistance in the 1253-1273 area.

Cherney is Market Analyst for Standard & Poor's

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