By Paul Cherney
On Friday, intraday indicators for both the Nasdaq and the NYSE reached levels which usually carry a residual positive effect on prices which can last for several trade days. This does not mean that there can't be a down day, but usually, once readings like this occur, a one-day price dip is greeted as a buying opportunity. Monday might see sluggish trade sideways with a drift lower.
The Nasdaq has multiple levels of resistance.
Immediate intraday resistance is 1,877-1,892.70, with especially thick resistance at 1,884-1,891.
The Nasdaq is currently inside resistance established in September: 1,867-1,913. There is another level of resistance for the Nasdaq at 1,908-1,946.23, with especially thick resistance at 1,921-1,937 (established on March 8 and 11, 2002). There is another layer of Nasdaq intraday resistance established January 24 - January 29, 2002, at 1,925-1,957, which makes the 1,925-1,937 area an overlapping focus of resistance.
To sum up Nasdaq resistance, here are the thickest layers where stalls in any advance would be more likely: 1,884-1,891, 1,908-1,913, and 1,925-1,937.
S&P 500 resistance is 1,032.60-1,050, based on intraday price action from June, 2003. There is a focus of resistance at 1,035-1,041. The next resistance is big at 1,048-1,107, from March, 2002. There is another layer of resistance which overlaps at 1,068-1,107. Two different measures of the potential upside for the early September bullish breakout above the 1,015 level target 1,047 and 1,070 as potential upside prints.
Immediate Nasdaq support is 1,856-1,827. The chart has a gap in prices which runs 1,864.54-1,842.55. In the event there is aggressive profit-taking and prices move into this gap (meaning print below 1,864.54), I would expect to see accumulation taking place.
The S&P 500 has immediate support at 1,026-1,014, with a focus of support at 1,023-1,018.
Cherney is chief market analyst for Standard & Poor's