Market Overview

Master Levels: Where Key Stocks Will Bounce/Pullback



The markets have shot higher over the last few days. From Friday's lows, the SPDR S&P 500 ETF Trust (NYSE: SPY) has jumped a full $5.00. The markets have made new all time highs and a short squeeze appears to be on. However, many name brand stocks have not made new 52 week highs and are lagging the S&P 500. This may be a negative divergence and could warn of a coming pullback.

Goldman Sachs Group, Inc. (NYSE: GS) is a great example of a stock that is not even close to making new 52 week highs as the S&P 500 makes new all time highs. The stock has bounced hard off the recent lows but is running into major resistance at the $150.00 level. There should be a pullback at/around this level. The current price on Goldman is $149.31, +2.79 (1.90%).

Google Inc (NASDAQ: GOOG) is moving sharply higher today. The stock is trading at $791.53, +13.88 (1.78%). While a great pop, the stock has two major moving averages coming up. The 50 and the 20 moving averages will converge at a price of $801.00 in the next few days. Should the price on Google move into that level, a pull back should be expected.

Lastly, I wanted to cover the volatility index, the VOLATILITY S&P 500 (INDEXCBOE:VIX) is trading lower today, but not as low as one would expect considering the sharp move higher in equity prices. This is often a leading indicator of a pull back. Based on this factor, by Friday, the markets should see a small dip back down.

Gareth Soloway

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Technicals Markets Trading Ideas


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