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Stock Jump Again On June 2, As The Next Big Resistance Level Approaches

It had been a very dull day yesterday, with stocks rocking between positive and negative territory. However, there was a massive $3.5 billion buy imbalance for the closing cross, which sent stock rocketing higher in the final 10 minutes. It left the S&P 500 closing at 3,081 resistance level. It is a region of resistance that we have been targeting now since the middle of May. We will have to see if the momentum can continue to carry the market higher.

Due to changes in open interest levels, it seems that options dealers are now using the 3,050 level as a region to get a long future to hedge themselves. As long as that remains, it looks like an area that will likely continue to offer the stock market support.

S&P 500 Index

S&P 500 Index

NASDAQ (QQQ)

The NASDAQ jumped above resistance on that buy imbalance too, and it managed to take the index higher above 9,573. I’m not sure if I should consider this a break out, or not, I would have preferred it not to happen due to the closing cross. Today we will give us a better assessment. Should the index continue to climb, it is likely to reach 9750.

Nasdaq Chart

Nasdaq Chart

The number of stocks on the S&P 500 above their 50 moving average was at the highest level ever, or at least based on as far as my chart goes back. I don’t know if it means anything; take it to mean whatever you want.

S&P 500 Stocks Weekly Chart

S&P 500 Stocks Weekly Chart

Zoom (ZM)

Zoom Video Communications (NASDAQ:ZM)will be one stock that should be watched closely. This is one of the most significant momentum stocks around. The company reported some fantastic numbers. I’m not sure if it is enough to keep the stock up. The company noted it expects earnings in a range of $1.21 to $1.29, better than estimates of $0.45 per share. That will result in analysts boosting their estimates. That should help to bring down some of the very high multiples. But still, to justify the valuation and get the stock to say five times one-year forwards, the company would need to have revenue jump to $10 billion next year, or even $10 billion by fiscal 2023. So if the momentum traders can stay alive and well, then that means this stock just continues higher.

Zoom Video Inc Chart

Zoom Video Inc Chart

Original Post

Stock Jump Again On June 2, As The Next Big Resistance Level Approaches

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