NASDAQ BOUNCING OFF 1900 - NSM AND TERADYNE LEAD CHIP BOUNCE -- CITRIX AND CISCO ARE NASDAQ LEADERS
FINDING SUPPORT NEAR 200-DAY AVERAGE... Yesterday we showed the Nasdaq 100 Index bouncing off its 200-day moving average and its December low near 34. Today we're focusing on the Nasdaq Composite which is in a similar support area. Chart 1 shows the Nasdaq finding chart support just above its 200-day moving average and its December low around 1900. The daily stochastic lines appear to be bottoming in oversold territory under 20. The daily MACD lines are very close to turning positive. Most of the technology strength is still coming from the semiconductor group, which we showed bouncing off its 200-day line yesterday (Chart 2). In today's trading, technology buying is also occurring in Internet, Networkers, and Software. Chart 3 shows the AMEX Software iShares bouncing off their 200-day moving average. The daily stochastic lines have turned positive while the daily MACD lines are close to doing the same.
Chart 1
Chart 2
Chart 3
CHIP LEADERS... Two of today's biggest chip gainers are National Semiconductor and Teradyne. NSM is the stronger of the two stocks and is trading at a two-month high. That certainly qualifies as a leader in the chip group. Chart 5 shows Teradyne bouncing off its 200-day average.
Chart 4
Chart 5
CITRIX AND CISCO ARE NASDAQ LEADERS... Citrix Systems is the biggest percentage gainer in the Nasdaq. Its daily chart shows the stock on the verge of hitting a new two-month high and rising back above its 200-day average. It's also close to breaking a four-month down trendline. It's relative strength line has already turned versus the Nasdaq Composite Index. Among the big-cap stocks that are bouncing today, Cisco is the only one still trading over its 200-day moving average. Chart 7 shows Cisco stabilizing above 22 and starting to exert upside Nasdaq leadership. Other big caps that are bouncing today -- like Intel, Oracle, and Microsoft -- are still trading below their 200-day lines. While technology is the day's strongest sector, healthcare is the day's weakest. MORE ON THAT LATER.
Chart 6
Chart 7
