SP500 moved away from session highs due to the pullback in tech stocks.
The tech-heavy NASDAQ pulled back below the 18,000 level.
Dow Jones gained ground as the majority of the index components moved higher.
SP500 120224 4h Chart
SP500 pulled back from session highs as traders took some profits off the table in tech stocks. Interestingly, the tech sector is the only market segment that has foudn itself under pressure in today’s trading session. General market sentiment remains bullish despite worries about a more hawkish Fed. Today, traders had a chance to take a look at Consumer Inflation Expectations report for January. The report indicated that Consumer Inflation Expectations remained unchanged at 3%, in line with the analyst consensus. While Inflation Expectations remain above Fed’s 2% target, they have stabilized at multi-month lows, which is bullish for stocks.
RSI remains in the overbought territory despite the recent pullback. In case SP500 settles below the 5020 level, it will head towards the nearest support, which is located in the 4990 – 5000 range.
NASDAQ 120224 4h Chart
NASDAQ moved back below the 18,000 level amid profit-taking in the tech sector. Not surprisingly, traders want to take some profits off the table after the strong rally. Tesla, which is down by 2.5%, is among the biggest losers in the NASDAQ index today. Traders remain worried about rising competition from Chinese EV producers.
If NASDAQ settles below the 18,000 level, it will move towards the next support, which is located in the 17,650 – 17,700 range.
Dow Jones 120224 4h Chart
Dow Jones tested new highs, supported by the strong performance of Goldman Sachs stock, which was up by 3%. Intel, which gained 2.6%, was also among the leaders in the Dow Jones index today.
RSI is close to the overbought territory, but there is enough room to gain additional upside momentum.
Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.