Nasdaq Drags Behind the Stock Market Rally; Trade These Charts

The weekly charts for the Dow Jones Industrial Average (INDU) , Dow Transports and the Russell 2000 ended last week positive. The Dow 30 was the only one of the five major averages to set a new all-time intraday high, which was 18,873.66, set on Nov. 10.

The S&P 500 and the Nasdaq Composite (NDAQ) ended last week with neutral weekly charts, as momentum continued to decline for both. The Nasdaq 100 continued to have a negative weekly chart, as momentum names like Apple (APPL) , Amazon (AMZN) , Alphabet (GOOGL) and Facebook (FB) ended the week with negative weekly charts.

The weekly chart for S&P futures shows that if the S&P sustains gains this week, it will have a positive weekly chart next week.

Here's the weekly chart for the SPDR Dow Jones Industrial Average ETF (DIA) , a.k.a. Diamonds.

 

Courtesy of MetaStock Xenith

Diamonds closed Friday at $188.47, up 8.3% year to date, after setting its all-time intraday high of $188.82 on Nov. 10.

The weekly chart for Diamonds ended last week with an upgrade to positive from negative with the ETF above its key weekly moving average of $182.74 and well above its 200-week simple moving average of $167.53. The weekly momentum reading snapped up to 33.82 last week, up from 30.18 on Nov. 4.

Investors looking to buy Diamonds on weakness to its 200-day simple moving average of $177.58 could do so on election night, as Dow futures plunged by more than 800 points. My quarterly level of $183.08 will likely be a magnet until the end of 2016. Investors looking to reduce holdings should do so on strength to $195.95, which is a key level on technical charts until the end of November.

Here's the weekly chart for SPDR S&P 500 ETF Trust (SPY) , a.k.a. Spiders.

 

Courtesy of MetaStock Xenith

Spiders closed Friday at $216.42, up 6.2% year to date, vs. its all-time intraday high of $219.60, hit on Aug. 23.

The weekly chart for Spiders has been upgraded to neutral from negative, with the ETF above its key weekly moving average of $213.83 and above its 200-week simple moving average of $192.82. The weekly momentum reading slipped to 31.80 last week, down from 32.87 on Nov. 4.

Investors looking to buy Spiders should do so on weakness to its 200-day simple moving average of $208.93. I show a quarterly pivot of $216.55 as a magnet until the end of 2016, and investors looking to reduce holdings could have done so at that level last week. investors looking to reduce holdings should consider selling strength to $230.46, which is a key level on technical charts until the end of November.

Here's the weekly chart for the PowerShares QQQ Trust ETF (QQQ) , or QQQs.

Courtesy of MetaStock Xenith

QQQs closed Friday at $115.80, up 3.5% year to date, after setting an all-time intraday high of $119.66 on Oct. 25.

The weekly chart for QQQs remains negative, with the ETF below its key weekly moving average of $116.33. The ETF is above its 200-week simple moving average of $96.59. The weekly momentum reading declined to 55.73 last week, down from 67.16 on Nov. 4.

Investors looking to buy QQQs could have bought on weakness to the 200-day simple moving average of $110.80 overnight on election day as the Nasdaq 100 futures contract was down by more than 200 points. The 200-day simple moving average is now $110.93. Investors looking to reduce holdings should sell strength to $119.81, which remains a key level on technical charts until the end of 2016.

Here's the weekly chart for the iShares Transportation Average ETF (IYT) .

Courtesy of MetaStock Xenith

The transports ETF closed Friday at $154.36, up 14.6% year to date. But Dow transports remains 7.9% below its all-time intraday high of 9,310.33, set on Nov. 28, 2014.

The weekly chart for the transportation ETF has been upgraded to positive from neutral, with the ETF above its key weekly moving average of $145.90 and above its 200-week simple moving average of $137.61. The weekly momentum reading ended last week at 76.83, up from 75.37 on Nov. 4.

Investors looking to buy the transportation ETF should consider doing so on weakness to $139.62 and $136.24, which are key levels on technical charts until the end of 2016. The $151.34 level has become a magnet until the end of November. Investors looking to reduce holdings should do so on strength to $167.80, which is the all-time intraday high set on Nov. 28, 2014.

Here's the daily chart for the iShares Russell 2000 ETF (IWM)

Courtesy of MetaStock Xenith

The small-cap ETF closed Friday at $127.36, up 13.1% year to date. The Russell 2000 is 1.1% below its all-time high of 1,296.00, set on June 23, 2015.

The weekly chart for the small-cap ETF has been upgraded to positive from negative, with the ETF above its key weekly moving average of $121.52 and above its 200-week simple moving average of $112.33. The weekly momentum reading ended last week at 35.39, up slight from 35.00 on Nov. 4.

Investors looking to buy this ETF should do so on weakness to $119.80, which is a key level on technical charts until the end of this week. The $127.25 level was a good point to reduce holdings last week, and is a magnet until the end of 2016. Investors looking to reduce holdings should do so on strength to $143.08, which is a key level on technical charts until the end of 2016.

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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