Watching the NDX 5-day RSI for a Fifth Consecutive Close in Overbought Territory

Illustrating the persistent strength in technology issues, the 5-day RSI for
the Nasdaq100 closed in overbought territory (over 75) for a fourth
consecutive session Thursday. That opens up the possibility of a short-term
buy signal at tomorrow's close. The level to watch Friday is NDX 1957.25 - a
settlement above that level will keep the 5-day RSI over 75 for a fifth
consecutive session and trigger a short-term buy setup. Historically, when the
Nasdaq manages to hold in overbought territory for a five-day time span, it's
a sign of an unusually strong uptrend. As the table below illustrates, the NDX
has a strong track record of continuing to push higher over the short-term
when the trend is this persistent. In 29 out of the last 30 separate
occurrences stretching back to 1995, the NDX closed at a subsequently higher
level within the next three sessions...

Nasdaq100 5-day RSI over 75 Five Consecutive Sessions
09/28/07... Higher NDX close one session later
07/18/07... Higher NDX close one session later
04/26/07... Higher NDX close one session later
11/17/06... Higher NDX close one session later
09/18/06... Higher NDX close two sessions later
11/23/05... Higher NDX close one session later
11/09/05... Higher NDX close one session later
07/15/05... Higher NDX close two sessions later
05/20/05... Higher NDX close one session later
11/08/04... Higher NDX close three sessions later
06/01/04... Higher NDX close four sessions later
01/09/04... Higher NDX close one session later
09/02/03... Higher NDX close two sessions later
03/20/03... Higher NDX close one session later
11/16/01... Higher NDX close one session later
08/29/00... Higher NDX close one session later
12/22/99... Higher NDX close one session later
11/04/99... Higher NDX close one session later
01/08/99... Higher NDX close one session later
11/23/98... Higher NDX close two sessions later
11/10/98... Higher NDX close one session later
07/14/98... Higher NDX close one session later
02/03/98... Higher NDX close one session later
07/14/97... Higher NDX close one session later
11/11/96... Higher NDX close three sessions later
09/19/96... Higher NDX close one session later
04/24/96... Higher NDX close one session later
02/06/96... Higher NDX close two sessions later
06/21/95... Higher NDX close one session later
02/10/95... Higher NDX close three sessions later

Categories : Archived EOD Commentary, End-of-Day Commentary

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