Yesterday's market action was positive.
Yesterday was a day filled with lots of action. The Nasdaq Composite surged 1.44% in above average volume indicating aggressive institutional buying (Point A).
With the Nasdaq finding a bottom on the 26th October (Point B), Thursday's move could have been classed as a day 4 follow through (Point C). Follow throughs help to confirm a change in trend from down to up. Ideally the gain the index makes needs to be 1.7% or greater which means this one fell slightly short of the mark.
I was also pleased to see the semiconductor sector, the heart and soul of the Nasdaq, following through on day 6 of a new rally attempt (Point F).
Leading stocks action was positive. A larger than normal number of leaders gained ground in heavy volume, many of them breaking out of bases, a bullish signal.
With the market following through, the chip sector behaving constructively and leading stocks acting extremely well, it appears that the correction has finally found a bottom. If true, it means the market, stocks, and funds will soon start heading back higher. My short-term stance has now switched to bullish.
Please note past performance should not be used as a guide to future performance, which is not guaranteed. Investing in Funds should be considered a long-term investment. The value of the investment can go down as well as up and there is no guarantee that you will get back the amount you originally invested.
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