Steve Zito, MS Fin/BS Econ Wharton School, HTML Writers Guild
uses economic and technical analysis to forecast the direction of the stock market. The views in this newsletter are opinions only, and should not be relied upon as advice on investment decisions.
Nasdaq Mar.25 -Trading Tips -Sitemap -Stock Picks -WRITE ME

NASDAQ COMPOSITE
INDEX closed 1826.75

Nasdaq will rally briefly on Mar. 28, 2002

******************Commentary*******************
Mar. 28 Go To Page 2. Nasdaq Composite closed at 1826.75 Mar. 27. Dow Jones closed 10,426.91. Dow closed Wednesday almost where it was last Friday, after testing 10,292 support on Monday. Without all clear yet for 11,000, economic reports this week support bullish case. Stock markets advance first days of April each year only to fall in the 2 weeks before April 15 tax deadline as investment cash is diverted to tax payments. Watch for an advance and intermediate peak by next Thursday. The 90-day Dow moving average is 10,416. Industrials are 0.1% above it. Current short-term trend is neutral. Dow Industrials moving average had been rising for 25 straight trading days until a week ago in a solid 8.5% advance from the 9600 level which began Feb.11. I expect advance to resume for first days of April, possibly to 11,000, but any rally should be used to exit the markets until April 16. Dow RSI deteriorated to neutral, breaking a 3-week trend. MACD is negative but changing direction, and Dow's stochastics have turned up to 53%/27%, suggesting next move is higher. Next week buy April Dow Jones put positions for April 19 expiration to profit on weakness in the Dow between April 5 and 15. Nasdaq has a major gap between 1898 and 1927 left on Feb. 11. On 10-day chart, Nasdaq is 0.2% above moving average support at 1823. RSI negative, MACD positive, both are turning higher reflecting a rally. Stochastics are neutral 76%/50% forecasting mediocre recovery next week. Rebound next week should fill the short-term gap between 1858 and 1880 before late April Nasdaq advance to fill a large chart gap from 1898 to 1927. Tuesday, Nasdaq fell to 1807, technical analysts were advising buy. On an intermediate 90-day chart, Nasdaq 0.7% below 90-day moving average resistance at 1840. Is economic recovery just around the corner? Not for Nasdaq tech stocks. On the other hand, rising interest rates soon could drive money out of Dow stocks into Nasdaq. Dow stocks carry large debt, Nasdaq tech stocks funding uses equity. Intermediate RSI, MACD negative after being positive most of early March. 90-day stochastics stopped falling and are now slightly over-sold at 26%/20%.
Technically, the Nasdaq is limited near 1800, but is not going to 2100 anytime soon. Long-term Nasdaq moving average resistance at 1850. The Nasdaq exhibits its pattern like June-July, when the 2100 level became a 10-month ceiling. Nasdaq would present a terrific buying opportunity on a possible, not probable fall to 1620 to complete what technical analysts often call "reverse head and shoulders." Short and intermediate charts do not predict this happening. RSI, MACD both negative, neutral stochastics have fallen down to 48%/58%. For now the Nasdaq long-term chart forecasts a sideways range 1700 to 2000.
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