The Daily Chartist: Don't Sweat Friday's Resistance

The Chartist knows these trouble spots are just part of the process.
Author:
Publish date:

March 27, 2000

After Friday's action, it's quite apparent the markets are sitting at resistance. For the

Nasdaq, 5000 seems to be a struggle and the

Dow Jones Industrial Average hits a trouble spot around 11,000. In addition, I had a first target calculated on the

S&P 500 at 1530, which we have now achieved.

However, we should not be concerned just because we're at resistance; it means we may require a bit more work before pushing through. The

NYSE

is heading toward the overbought side of the ledger, but that's the worst we can say about it. Just being overbought is not negative. The Nasdaq continues to be quite oversold, despite the huge rally late last week.

One minor change is that sentiment has begun to creep up. The

Investor's Intelligence

bullish percentage is back at 55.7%, the highest it's been since late January.

Should any of these factors take the market down, we should remember the improvement that has taken place underneath. A selloff should help improve the charts, as the first time up, we should not expect stocks to get through resistance. Eating through resistance is a process: Each time we back off and come on again, we eat further into the overhead resistance. The downside should make this market even better, so let's concentrate on buying the dips.

Overbought/Oversold Oscillators

Helene Meisler, based in Singapore, writes a technical analysis column on the U.S. equity markets on Tuesdays and Fridays, and updates her charts daily on TheStreet.com. Meisler trained at several Wall Street firms, including Goldman Sachs and Cowen, and has worked with the equity trading department at Cargill. At time of publication, she held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. She appreciates your feedback at

KPMHSM@aol.com.