Strong company earning overcame the profit taking in the beginning of the week and kept the stock rally going. For the week, S&P 500 index closed at 1238 up 1.12%, the Dow Jones Industrial Average gained 1.41%, while the Nasdaq composite index decreased 1.14%.
It is encouraging to see S&P 500 index stay above the top of the trading channel at 1220 after breaking it last week. However, the downward trend line provide a stronger resistance at 1257 as seen from the weekly chart below. The index is at the critical juncture as its momentum indicator, STO, is trying to break above 50 and the price is attacking to the trend line.
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