COMPQ Nasdaq Composit Daily Chart; Megaphone Expansion Patterns

Large-cap tech stocks did not initially participate in the Trump Rally but came on strong last week. The dark blue expansion pattern is in play, also called a megaphone pattern since it expands outward. Keystone added the megaphone handle and mouthpiece to create the effect. The dark blue expansion pattern shows more upside available until the top rail is hit. A more gentle-sloping fit of the data points is the lighter blue line and price is at the top rail of this pattern.

The indicators are in the same shape as the SPX daily chart; negatively diverged over the four-month time frame and in the shorter couple-day time frame except for the MACD line and money flow that are long and strong and have short term momo. Thus, a day or two of down action followed by a day or two of up action, perhaps heading into the Thanksgiving holiday on Thursday, may be on tap.

A massive upside breakout that the consensus is looking for may not materialize. Price may instead want to top out this week and take a rest as soon as the MACD line and money flow roll over. Interestingly, despite all the bullish euphoria, the megaphone chart above projects the COMPQ in the 4950-5050 area say in late December and January (with price peaking at the top rails over the coming two weeks). The chart can be reviewed in a couple weeks to note the progress forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.