Investors' sentiment were majorly affected by worries about resurgent of CODV-19 virus outbreak and the optimism about the treatment and availability of the vaccine by year end. Tech stocks benefiting from remote working environment and led the markets higher. For the week, S&P 500 index went up 1.76% to 3185, Dow Jones Industrial Average gained 0.96% , and the technology laden NASDAQ composite index increased 4.01%.
S&P 500 index consolidated above its 28 week EMA with less volatility than previous 5 weeks. As the index is 6.2% above its trend line, it is encouraging to see the index taking a break to digest its gain with low volatility and wait for the trend line to catch up. As observed in the chart below, small positive candles (low volatility) above the trend line led to sustainable up tend, while large candles (high volatility) usually followed by corrections or severe pullbacks.
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| Weekly chart of S&P 500 index |
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