First Quarter Ends on a High! Will Up Trend Continue?

As we ended the first quarter of 2023, the indices experienced an important technical week last week, surging to multi-week, and in some cases, multi-month highs. Nasdaq’s Composite Index notched its biggest quarterly percentage gain since June 2020, closing at its highest level since last September 12th, with the Semiconductor group leading the way and the Nasdaq 100 climbing to a 7-1/2 month high, as well.

During the first quarter, Semiconductors were among the quarter’s strongest performing stocks, with the Philadelphia semiconductor index rising 27.6%! In addition, the broad-based S&P 500 closed at its highest level since February 15th, with a strong weekly performance of +3.5%.

However, to get confirmation of those indices price actions, the Transportation (TRAN) and small cap indices, (as measured by the IWM Russell 200 ETF), need to play catch up as they currently trail and remain UNDER their respective 50-day moving averages!

Underlying technical breadth was excellent during most sessions last week, with advance/declines, up/down volume and new high/new low ratios strong, confirming the strength of the rally.

Looking forward, the Nasdaq 100 (NDX) strength continues to lead and currently has its next technical target near overhead resistance from the August 2022 high near 13,865. The S&P 500 (SPX) shows resistance and its next technical target at the 4275-95 zone.

While the McClellan Oscillator, a measure of overbought/oversold, is near 180 and overbought, I believe it is a sign of a strong thrust in the market that may have initiated a new intermediate uptrend! It often gets quickly overbought and remains in that condition, perhaps, for weeks as indices extend their trends.

We’ll soon see if the indices have enough strength to do so.

In any case we’ll certainly keep you posted as to what may come at TheTechTrader.com.

Harry Boxer
Veteran Trader, Analyst & Founder of
TheTechTrader.com