The NASDAQ
Composite failed to hold support at 2224 (2/99 low)-2251 (2001 low close),
falling 56 to close at 2151.82, its lowest close since December 1998.
The deeply oversold index is likely to
test support at 2028 (the 7/98 high) in the coming days, with a short
lived bear market rally to follow carrying the index back up to 2230-2250,
before heading back down to retest the 2028 level.
Technical indicators remain negative,
but indicate a counter trend rally is nearing: Money Flow and
Accumulation/Distribution continue to decline, but RSI and MACD are
showing divergence with price and have failed to make new lows during this
last leg down.
Additional support levels exist at 1948
(the 50% retracement of the 10/98-2/99 rally), 1808, and a strong support
zone from 1715-1769. Below 1715, the next significant support is near the
1470-1480 level.
