Equal-Weighted S&P 500 Primed for Breakout | Investing.com

After the rejection at the resistance, it would have been easy for the equal-weighted S&P to return to its moving averages. However, yesterday’s close delivered a bullish dragonfly doji, although momentum is overbought, which means it’s not a reversal candlestick. Given the proximity to resistance, it’s well-positioned to deliver a breakout following the weighted S&P. Technicals are net bullish, but there is still significant underperformance relative to the weighted average.

Action over the last week in the weighted S&P has been shaping a solid handle. It now offers a good risk:reward opportunity and the chance for a measured move target to 7,900.

The equal-weighted Nasdaq 100 edged itself above its 200-day MA yesterday, but dropped back below it yesterday. Volume rose in confirmed distribution, although technicals are net bullish. This action may be a ’mini-bull trap’.

The Nasdaq is holding its breakout, showing decent demand at 24,200, and is a good place to place stops if looking to go long.

Semiconductors have yet to register a down day in nearly 3 weeks. It’s got to a point where you can’t be a buyer, but there isn’t a reason to sell either. Psychological resistance of 10K has been breached, and this is perhaps the new stop zone if long.

Equal-weighted indices are catching up with their weighted peers. Latter indices are offering good longside opportunities. Even if sellers strike, there is plenty of support to work with.