The long lower tail to the hammer candlestick which sits perfectly astride the 200-day EMA could be evidence that the Nasdaq Composite index (^IXIC) found support at a key level in yesterday's trading. There was not the same kind of compelling evidence of a floor being put in place that we were given from the dramatic trend day reversal off the bottom of the range that we saw in late November, and I must confess that I am not convinced that the downside testing is over.



The Russell 2000 (^RUT) produced the most impressive reversal yesterday and the engulfing green candlestick could give one a little more confidence to the hyptohesis that a near term support level may have been established. Action in the overseas markets overnight has been varied and I sense that global traders will be watching the US markets closely over the next couple of days for clues as to the best positioning ahead of the holiday shortened week ahead.



The S&P retail sector index (^RLX) also pulled out of its recent decline near to a critical level.



Here is the comment that I made on Monday regarding the triangular pennant pattern for Human Genome Sciences (HGSI), "A directional breakout is imminent and I would suspect that it is upwards."



Further to yesterday's discussion regarding Synaptics (SYNA) the stock plummeted another eight percent yesterday but may now find support at the 200-day EMA.



Reliance Steel (RS) is in the middle of its trading range and appears to be finding support above all three moving averages.



Juniper Networks (JNPR) has a pullback formation and the stock appears to be finding support at the converging shorter term moving averages.



Fuwei Films (FFHL) is a volatile and speculative stock that may not suit everybody's trading style but there is evidence of a flag/pullback that has now connected with two moving averages.



Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market. He specializes in market neutral investing and and is currently working on a book about the benefits of trading with long/short strategies, which is scheduled for publication later this year.

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