Market Update (2/18/99) - After several days of profit taking, Dow and NASDAQ might rebound from a technically oversold level.

U.S. stocks rose after several days of profit taking, as bargain hunters pushed Dow up over 100 points. Also, a series of economic reports increased optimism that corporate profits would remain strong. After an early weakness, Dow ended with a gain of 103.16, or 1.12 percent, to 9298.63 while NASDAQ Composite rose 11.64, or 0.52 percent, to 2260.55.

Dow opened lower, but the decline was well contained, which brought bargain hunters pushing Dow into positive territory by 10.30 a.m. Dow moved well into positive territory and remained there throughout the day. At the end, Dow closed with a solid gain of 103.16 points. IBM, McDonalds, Alcoa and General Motors powered Dow higher. Volume on the Big Board was 738 million shares, with up volume exceeding down volume by 1.78:1 ratio. Breadth was positive by net 535 net issues - decent, something we haven't seen for a while. If breadth can improve from here, Dow would have better than a decent chance of overtaking resistance at 9375-9400. Despite falling over 100 points yesterdays, Dow showed a glimmer of hope that it wanted to go higher and that opportunity came early in today's session. Once, Dow was able to overcome early profit taking, there was no stopping and continued to rise. Dow provided support to NASDAQ, which pared its losses and rose late in the session. Dow still remains well below its upper end of its trading range and only a close through that level would improve the technical picture. For the time being, it appears that there are enough buyers, which could push Dow through 9400.