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The Nasdaq Hits a new Record Close Thanks to Energy Rally

Volume isn't too substantial, but the direction of the markets is still upward

By Sam Collins, InvestorPlace Chief Technical Analyst

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On Monday energy stocks rallied, following higher crude oil prices and driving the S&P 500 and the Nasdaq to new record closes.

U.S. crude oil (WTI) closed at a three-week high following an announcement by Saudi Arabian and Russian ministers that they would support a nine-month extension to an agreement to reduce production. The original agreement was scheduled to expire in June. WTI closed at $48.85 per barrel, up 2.1%. It was the fourth consecutive day of gains for oil futures.

The “WannaCry” cybersecurity attacks, over the weekend, resulted in a rally in stocks that defend against such attacks, while the rest of the market appeared to play down the threat. FireEye Inc (NASDAQ:FEYE), Palo Alto Networks Inc (NYSE:PANW) and Symantec Corporation (NASDAQ:SYMC) rose 7.5%, 2.7% and 3.2% respectively. And small-cap firms also did well, driving the Nasdaq to a gain of almost 0.5%, and the Russell 2000 to a gain of 0.8%.

At the close, the Dow Jones Industrial Average rose 85 points to 20,982, the S&P 500 closed at 2,402, up 11, the Nasdaq closed at 6,150 for a gain of 28 points, and the Russell 2000 closed at 1,394 for a gain of 11 points. The NYSE’s primary exchange traded 849 million shares with total volume of 3.4 billion shares. The Nasdaq crossed 1.8 billion shares. On the Big Board, advancers outpaced decliners by 3-to-1, and on the Nasdaq, advancers led by 2-to-1. Blocks on the NYSE increased to 6,824 from 6,497 on Friday.


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The Nasdaq Hits a new Record Close Thanks to Energy Rally

Unlike the iShares Russell 2000 Index (ETF) (NYSEARCA:IWM), which I’ll chart tomorrow, the SPDR S&P 400 MidCap ETF (NYSEARCA:MDY) has lacked volume for almost two weeks. However, both ETFs have been supported at their respective 50-day moving average lines and both are trading in narrow bands. The MDY’s resistance is at 316, just over a point from its close and just over 5 points from a new high.

Conclusion: The MDY’s chart is bullish with a double bottom at 305 within a supportive “W” formation that began in February. But volume is lacking, and so traders should pay attention to the support/resistance lines along with any increase in shares traded. The market rarely does what most people think it will do, and so trying to “outguess” its near-term direction can be risky. Overall, however, the market is supporting the bulls.

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/05/nasdaq-record-highs-energy/.

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