Morpheus Trading: Stocks continue to chop around in a pretty tight range, with the NASDAQ Composite basically unchanged over the past five sessions, waiting for the 10-day MA to catch up.
Although there has been some early morning selling the past few sessions, the major averages have closed each session near the highs of the day, suggesting buyers are stepping in.
We view the price action over the past 3-5 days in the averages as bullish in the very near-term, though the intermediate-term head and shoulders pattern on the NASDAQ remains a concern.
We have one new setup for potential buy entry on today’s watchlist, which is S&P Midcap 400 ETF (NYSEARCA:MDY).
The monthly chart below shows $MDY trading in a fairly tight range the past three months, with the rising 10-month moving average providing support just below:
Drilling down to the weekly chart time frame, we see the price action climbing above the $250 resistance level and the downtrend line last week. The price action is holding above $250, with the 50-day MA beginning to turn up: