Source: StockCharts.com
The Diamonds Trust, Series 1 (NYSE:DIA) ETF, which tracks the Dow Jones Industrial Average, respected a support level earlier this week and ended up surging from those lows. The $100 level has become a clear level to watch, as bulls have aggressively defended it on a few occasions. Looking above, DIA is testing an important level near $105, which is the lower end of a bearish gap. The close above the nearby 200-day moving average suggests that the rally could last much longer than some are anticipating and reduces the probability of a double dip. Friday's close above this level could lead to a test of the more important level of $107.
Source: StockCharts.com
The Powershares QQQ ETF (Nasdaq:QQQQ) pushed higher and remained above its 200-day moving average for the second consecutive week. Many traders will now set their sights on the August high of $47.19. The sharp rebound over the past few weeks may have trapped some bears and it should add to the upward pressure moving forward. If QQQQ breaks above the high, it could lead to a longer term trend higher.
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