Closing Analysis

Indices Close Near Resistance RSS

Closing Technical Market Analysis for Wed October 27th 2010

The stock market indices had a volatile morning, opened with a sharp gap lower, rallied back sharply on the Nasdaq 100, but couldn’t match that on the S&P 500 and Dow, and rolled over to new session lows on the S&P 500. The NDX at that point, however, held support around 2105.

They tried to rally, pulled back to test support, created double bottoms on the S&P 500, triple bottoms on the NDX, and then rallied sharply for the rest of the day into the close to finish positive on the NDX by 6.83 at 2125.88. However, the S&P 500 and Dow did not manage to get back into positive territory. Still, the S&P 500 was substantially off the lows by 11 points, down 3.19 at 1182.45. The Dow was about 100 points off its low, down 43.18, closing at 11,126.28.

Advance-declines were almost 2 to 1 negative on the New York Stock Exchange and about 3 to 2 negative on Nasdaq. Up/down volume was a little less than 2 to 1 negative on New York with total volume around 1 billion. On Nasdaq, however, it was nearly 2 to 1 positive with over 2 billion traded. board was very active, with many point-plus gainers today. Leading the way was Oceaneering International, Inc. (OII) up 8.59 to 62.88, a gain of 16%. Broadcom Corp. (BRCM) had a big day, up 4.34 to 41.56. JDA Software Group Inc. (JDAS) advanced 2.86 to 25.01, or 13%, with Molycorp, Inc. (MCP) up 3.38 to 38.56 and Rare Element Resources Ltd. (REE) up 1.52 to 12.77.

Radware Ltd. (RDWR) gained 1.94 to 35.96, McMoRan Exploration Co. (MMR) 84 cents to 16.42, Netgear Inc. (NTGR) 3.47 to 31.75, and Compellent Technologies, Inc. (CML) 6.29 to 25.99, up 32%. Silicon Image (SIMG) jumped 1.60 to 6.15 or 35%, and Vocus Inc. (VOCS) 3.67 to 22.25, or 20% there as well.

Other point-plus gainers of note were BSD Medical Corp. (BSDM), up 82 cents to 4.76, or 20%. Ebix Inc. (EBIX) advanced 68 cents to 24.63, Entropic Communications, Inc. (ENTR) 42 cents to 9.01, Life Technologies Corporation (LIFE) 2.90 to 50.69, and TowerStream Corporation (TWER) 32 cents to 3.14.

In addition, Anadigics, Inc. (ANAD) gained 55 cents to 6.75, QuickLogic Corp. (QUIK) 48 cents to 6.10, Quantum Corp. (QTM) 36 cents to 3.20, and RiT Technologies Ltd. (RITT) 1.27, or 29%, to 5.60. Limelight Networks, Inc. (LLNW) added 33 cents to 7.06, VirulPharma 1.04 to 16.50, Acme Packet, Inc. (APKT) 1.19 to 40.23, JinkoSolar Holding Co., Ltd. (JKS) 2.48 to 30.48, and Motricity, Inc. (MOTR) 1.17 to 20.90.

There are many other point-plus gainers today, but too many to mention.

On the downside, Inc. (AMZN) lost 2.44 to 167.51, while Apple Inc. (AAPL) gave back 22 cents to 307.83. So you can see that some of the market leaders were not participating, and that is an ominous sign, in my opinion.

Losers of note on our board today were Endo Pharmaceuticals Holdings Inc. (ENDP) down 40 cents to 36.67, and Sourcefire, Inc. (FIRE) down 75 cents to 30.99, but in after hours it was trading 6.00 lower after releasing earnings. IDT Corporation (IDT) was down 68 cents to 15.05, and Spreadtrum Communications Inc. (SPRD) down 42 cents to 14.17 complete the losers.

Ultra-short ETF Direxion Daily Emrg Mkts Bear 3X Shares (EDZ) was up 1.20, closing at 24.76.

Stepping back and reviewing the hourly chart patterns, the indices were down at the opening, rallied back sharply, but couldn’t follow-through. They then rolled over to mid-day support and held there, creating conditions for a snapback rally that retested the moving averages on the hourly charts on the SPX and also tested lateral price resistance. The key is that the indices closed at or near resistance.

We’ll have an important day tomorrow to see whether we can follow through, or whether they rollover here creating a topping pattern.

Good Trading!


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- Harry Boxer

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