With the major indices quite overbought, it is not surprising that the bullish momentum is slowing down a bit. NFLX just reported a disappointing earnings which is likely to drag the Nasdaq down a bit but perhaps not that much.
As you can see from the chart above, QQQ is quite overbought with a reading of more than 96 in the stochastics. Therefore at least a slowing bullish momentum can be expected. If you check the SPY and DIA you will also notice the same overbought readings.
The chart above shows the 60 min chart of DIA and frankly speaking the market is overbought but there is no 60 min downtrend yet. The uptrend in the 60 min chart is still intact and there is some support area below. DIA is still above its rising 20 MA and 50 MA though I must say that it is trading quite near the previous resistance.
It might take some time to overcome this resistance. No weakness yet in the 60 min trend but if DIA starts to drop below the 20 MA and 50 MA then we have to be careful of a more deeper correction.
Netflix reported earnings news that are below expectations and therefore might be gapping down today. However there is ample daily support below. Bargain hunters might want to have a look and see if NFLX can stabilize there.
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