One part of technical analysis that is not discussed as much as the levels derived from the actual charts, is “Psychological” support and resistance levels. Besides retail investors, as well as institutions, place large orders at whole numbers for intraday trading, those levels on a closing basis may tip trading systems in bullish or bearish modes.
On Friday, the index posted its highest rebound for the recent rally at 4000.25. Although the index breached Friday’s high by a nice margin (4017.50 vs. 4009.75), the rally faded into the close. Once that level was breached in the final 45 minutes, the pace of the decline accelerated.
The end result was a decline of 34.25 handles with a closing price of 3966.
A move back into value stocks propelled Johnson & Johnson (NYSE: JNJ) to be the biggest winner of the top components of the index. For the session, the issue advanced by $2.66 or 1.57% to close at $171.91.
That was nearly 3% better than the cash index’s decline of 0.89%.
Tesla Inc. (NASDAQ: TSLA) was the biggest loser of the top components of the index. For the session, the issue declined by $5.02 or 2.6%.