Tech-Heavy Nasdaq, India's Nifty 50, Preventing Global Stock Market Correction

The technicals for the five major U.S. equity averages improved this week. The Dow Jones Industrial Average (INDU) , the S&P 500 , Dow transports and Russell 2000 may have neutral weekly charts, unless there's a sell-off on Friday. The Nasdaq Composite (NDAQ) continues to have a positive but overbought weekly chart, and remains below its all-time intraday high of 5.936.39 set on April 5.

Overseas, the Nikkei 225 continues to have a negative weekly chart. The Shanghai Composite will likely end the week with a downgrade to a negative weekly chart. The German DAX could have a downgrade to neutral or negative as this week comes to an end. The Nifty 50 will continue to have a positive but overbought weekly chart.

It's been a week without new highs for any of the nine major global averages. India's Nifty 50 is the only major overseas average to set a new high in 2017, and each of the other three remain below highs set between April 10, 2015, and June 24, 2015.

Here's This Week's Scorecard
Here's This Week's Scorecard

Courtesy of Global Market Consultants

India's Nifty 50 has the largest year-to-date gain of 11.6%, down from 12.4% last week. The Nasdaq is up 9.9% year to date up from 8.4% last week. On the weak side of the ledger, Dow transports is up just 0.9% year to date, with Japan's Nikkei 225 is down 3.6% year to date.

Japan's Nikkei 225
Japan's Nikkei 225

Courtesy of MetaStock Xenith

The weekly chart for the Nikkei 225 remains negative with the index below its key weekly moving average of 18,859.09. The 200-week simple moving average is a major support at 16,994.38. Weekly momentum is projected to decline to 33.17 this week.

The Nikkei 225 (18,430.49 on April 20) set its multiyear-intraday high of 20,952.71 on June 24, 2015. The average is in correction territory 12% below the high. Buy weakness to my quarterly value level of 16,876. My monthly pivot is 19,911. Reduce holdings on strength to my annual risky level of 20,169.

China's Shanghai Composite
China's Shanghai Composite

Courtesy of MetaStock Xenith

The weekly chart for the Shanghai Composite will likely be downgraded to negative this week with the average below its key weekly moving average of 3,221.48. The 200-week simple moving average is a major support at 2,870.45. Weekly momentum is projected to decline to 76.26, falling below the overbought threshold of 80.00.

The Shanghai Composite (3,172.10 on April 20) set its multiyear intraday high of 5,178.19 on June 12, 2015. The average remains mired in bear market territory 38.7% below this high. Buy weakness to my quarterly value level of 2,776. My monthly pivot is 3,330. Reduce holdings on strength to my annual risky level of 3,879.

India's Nifty 50
India's Nifty 50

Courtesy of MetaStock Xenith

The weekly chart for the Nifty 50 remains positive but overbought with the average above its key weekly moving average of 9,045.69. The 200-week simple moving average is a major support at 7,729.49. Weekly momentum is projected to end the week at 90.38, still well above the overbought threshold of 80.00.

The Nifty 50 (9,136.40 on April 20) set its all-time intraday high of 9,273.90 on April 5. Buy weakness to 8,744 and 8,272, which are my monthly and quarterly value levels, respectively. Reduce holdings on strength to my semiannual and annual risky level of 9,431 and 10,545, respectively.

Germany's Deutsche Boerse DAX
Germany's Deutsche Boerse DAX

Courtesy of MetaStock Xenith

The weekly chart for the German DAX remains positive but overbought if Friday's close is above its key weekly moving average of 12,029.26. Otherwise, the chart will be neutral, possibly negative. The 200-week simple moving average is the major support at 10,160.38. Weekly momentum is projected to end the week at 82.89, just above the overbought threshold of 80.00.

The German DAX (12,027.32 on April 20) is still shy of its all-time intraday high of 12,390.75 set on April 10, 2015. Buy weakness to my quarterly value level of 9,725. My monthly pivot is 12,304. Reduce holdings on strength to my semiannual and annual risky levels of 12,716 and 12,844, respectively.

Dow Jones Industrial Average
Dow Jones Industrial Average

Courtesy of MetaStock Xenith

The weekly chart will be downgraded to negative given a close on Friday below its key weekly moving average of 20,569.82, otherwise the chart stays neutral. The 200-week simple moving average of 17,416.20 is a major support. Weekly momentum is projected to end the week slipping to 66.17, moving further below the overbought threshold of 80.00.

The Dow Jones Industrial Average (20,578.58 on April 20) set its all-time intraday high of 21,169.11 on March 1. Buy weakness to my quarterly value level of 19,189. My semiannual pivot is 20,893. My annual value level is 15,111. Sell strength to my annual and semiannual risky levels of 22,042 and 22,148, respectively.

S&P 500
S&P 500

Courtesy of MetaStock Xenith

The weekly chart will be downgraded to negative given a close on Friday below its key weekly moving average of 2,346.21, otherwise the chart becomes neutral. The 200-week simple moving average is a support at 2,011.92. Weekly momentum is projected to end the week slipping to 69.51, moving further below the overbought threshold of 80.00.

The S&P 500 (2,355.84 on April 20) set its all-time intraday high of 2,400.98 on March 1. Buy weakness to my quarterly value level of 2,225.2. My annual value level lags at 1,676.1. Sell strength to my semiannual risky level of 2,492.4. My annual and semiannual risky levels are 2,537.9 and 2,608.9, respectively.

Nasdaq Composite
Nasdaq Composite

Courtesy of MetaStock Xenith

The weekly chart remains positive but overbought with the average above its key weekly moving average of 5,838.61. The 200-week simple moving average of 4,718.14 is a major support. Weekly momentum is projected to slip to 86.67 this week, still above the overbought threshold of 80.00.

The Nasdaq Composite (5,916.78 on April 20) set its all-time high of 5,936.39 on April 5. Buy weakness to my quarterly value level of 5,512. My monthly and semiannual pivots are 5,883 and 5,946, respectively. My annual value level is 4,331 with annual and semiannual risky levels at 6,253 and 6,387, respectively.

Dow Jones Transportation Average
Dow Jones Transportation Average

Courtesy of MetaStock Xenith

The weekly chart remains negative if the index closes Friday below its key weekly moving average of 9,118.79, otherwise there's an upgrade to neutral. The 200-week simple moving average is a major support at 8,029.45. Weekly momentum is projected to end the week sliding to 32.34, approaching the oversold threshold of 20.00.

Dow Transports (9,126.13 on April 20) set its all-time intraday high of 9,639.33 on March 1. My annual and quarterly value levels are 7,910 and 7,741, respectively, with a weekly pivot of 9,073. Sell strength to my monthly and semiannual risky levels of 9,684 and 9,980, respectively. Annual and semiannual risky levels are 10,167 and 10,713, respectively.

Russell 2000
Russell 2000

Courtesy of MetaStock Xenith

The weekly chart is negative with the index below its key weekly moving average of 1,371.53. Otherwise, the chart will be upgraded to neutral. The 200-week simple moving average of 1,179.28 is a key support. Weekly momentum is projected to decline to 44.36 this week.

The Russell 2000 (1,385.15 on April 20) set its all-time intraday high of 1,414.82 on March 1. Buy weakness to my quarterly value level of 1,222.14. My annual value level is 1,091.77. Sell strength to my monthly and semiannual risky levels of 1,420.67 and 1,487.52, respectively. My annual and semiannual risky levels are 1,548.95 and 1,549.50, respectively.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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