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Good Morning, this is Capital Essence’s Market Outlook (the technical analysis of financial markets) for Friday July 1, 2016.
Stocks closed out the third quarter with a gain as stronger-than-expected economic data had helped offset Brexit concerns. For the day, the Dow Jones industrial average closed up 235.31 points, or 1.33 percent, at 17,929.99. The S&P 500 closed up 28.09 points, or 1.36 percent, at 2,098.86. The Nasdaq composite closed up 63.43 points, or 1.33 percent, at 4,842.67. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, fell 6.07 percent to 15.63.
ManTech International Corp (MANT) was a notable winner Thursday, surged 4.10% to 37.82 – a 52-week closing high. This is bullish from a technical perspective. In fact, a closer look at the daily chart of MANT suggests that the stock could climb above 44 in the coming days. Just so that you know, initially profiled in our March 16, 2016 “Swing Trader Bulletin” MANT had gained about 27% and remained well position. Below is an update look at a trade in MANT.
The graphics below are from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red. The yellow bars identify period of neutral or sideways trading pattern. Additionally, the light-blue shading represents the short-term trading range. A move above or below that range is considered overbought (as represents by the red shading) or oversold (as represents by the dark-green shading). Readings above or below the red and green shaded areas are considered extremely overbought or extremely oversold.
Chart 1.1 – ManTech International Corp. (daily)
As indicated in the above chart, our “U.S. Market Trading Map” rates MANT as a Buy. The overall technical outlook remains bullish. Last changed June 28, 2016 from neutral.
MANT has been on a tear in recent days after last week correction tested and respected support at the trend channel moving average (as represents by the white line in the chart). Money Flow measure held mostly above the zero line since the stock reached an interim low in February, indicating there was little selling interest. This is a bullish development, supporting further upside follow-through. Thursday’s upside breakout had helped clear resistance at the range top, signaled resumption of the major upswing that projects to 44.20, based on the 161.8% Fibonacci extension. Resistance stands in the way of continue rally is around 38.50, based on the April reaction high and the 127.2% Fibonacci extension
Support is at 35.28. At this juncture, only a close below that level can wreck the near-term bullish outlook.
Chart 1.2 – S&P 500 index (daily)
Near-term technical outlook shifted to bullish. Last changed June 29 from bearish (see area ‘A’ in the chart).
[Note: for more details analysis, please take a look at our “US Market ETF Trading Map”]
S&P broke out above the trend channel moving average after falling below it last week. This level is significant in charting terms. It was an area where other pullbacks during the prior two months found a floor and where the market broke down last week. This is a bullish development, supporting further upside follow-through and a test of the bull market high of 2134. Nonetheless, given the magnitude of recent rally, S&P could see some near-term weakness, but ultimately push itself higher.
Near-term, the market had carved out key support and resistance for traders to monitor. The lower end of the pink band, around 2100, represents key price level. A sustain advance above that level would see a pickup in longer term momentum, supporting further upside follow-through and a retest of 2134 but for now it looks firm.
As for support, trend channel moving average, currently at 2076, represents key support. Expect S&P to draw in buyers in any pullback toward this level.
In summary, S&P cleared key resistance Thursday, setting up the stage for a retest of the bull market high of 2134 set last May. Nonetheless, market had a big move off 1991 so there is a good chance S&P will see some near-term weakness, but ultimately push itself higher.
(By：Michelle Mai for Capital Essence)
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