Stock Indices Pause After Breakout Move

The Stock Indices reached a slightly overbought condition on Wednesday. Since then, they have worked off most of he overbought condition without much price depreciation. While the internals weaken during a pause phase, a move above Thursday’s high will suggest the breakout is continuing. Trading below Friday’s low suggests the possibility of a retest of the breakout point. Price is approaching important longer-term upside resistance. Use caution on a test of that resistance and diverging internals. Alternatively, if that resistance is tested on strengthening internals, expect a longer-term breakout move that could be significant.

Leave a Reply

Your email address will not be published. Required fields are marked *