Thursday was the day the bulls were looking for, but was the buying a fundamental change in trend or merely another bout of random volatility likely to fade or reverse in the next few days?
Beginning with the Invesco QQQ Trust (QQQ) , price exploded higher, clearing all short-term moving averages, the multi-week downtrend and the volume-weighted average price anchored to the Feb. 2 swing high. While nearly 88% of Nasdaq 100 stocks gained ground on Thursday, the bulk of the advance was led by semiconductor names such as Advanced Micro Devices (AMD) and Intel (INTC) .
Speaking of semiconductors, while AMD looks bullish and appears to have a runway toward $101 to $104, Intel's technical picture is more chaotic. I'm long Intel from a bit lower in a value and dividend-focused portfolio, but there's no denying the stock is trapped between $25 and $30.
With the 200-day simple moving average (SMA) crashing down on Intel only a smidge above Thursday's closing price, I'd be careful chasing the stock without allowing it time to settle above the top of its range first. Oh, and seeing Intel's 14-period Relative Strength Index (RSI) reading above 82, which is overbought in the context of sideways consolidation, doesn't give me the warm and fuzzies.
Away from the QQQ, everything from the SPDR Select Sector Financial ETF (XLF) and SPDR Select Sector Energy ETF (XLE) to the SPDR S&P 500 ETF (SPY) and iShares Russell 2000 ETF (IWM) continue to trade beneath important moving averages.
The SPY closed back above its 200-day SMA on Thursday, and with support sitting around $380 it's not unreasonable to consider buying a shallow dip here on Friday toward the low $390s, using $380 as your stop.
As someone who spent countless hours over many years trading energy stocks, it's easy for me to find something to love in the oil patch. But now, with the XLE well beneath $82.50 support and the now-flattening 200-day SMA, I don't see much to love.
The charts of XLF and IWM are relatively similar. Both are bouncing from support, with the IWM bouncing from $170 and the XLF finding buyers above $30. If you're trading these two ETFs, keep a tight leash around those support levels and remember that additional bank failures or fears over recession likely will send these two stocks back toward their October lows.