OMXS30 hesitates at significant resistance…

Last week Nasdaq OMX continued to move higher during relatively modest trading activity. OMXS30 closed at 1646.28, gaining +1.3 percent. The index has gained +8.5 percent this year alone, +12.0 percent if adjusting for dividends.

Looking at the news surrounding OMXS30-stocks, Assa Abloy fell due to the announcement that CEO Johan Molin might be leaving the company 2018. H&M:s chairman and major stock holder Stefan Persson continued to buy more stocks in the clothing company, this time 4.4 million stocks for about 914 million SEK, adding on the the 30 million stocks purchases done this year alone. The stock gained another +1.5 percent on the news, which has only given temporary fuel during the year.

The market is looking to be in a slight waiting sentiment before the upcoming earning seasons in little more than a week. This summer’s weak earning season, which caused the market to move lower will be interesting to see if surprise on the up side comes to light.

The market is also technically overbought, and trading right below a significant resistance area around 1660. Last but not least, the last positive momentum in the market has been during relatively modest market activity. The market turnover has often been lower during days when the market has been trading higher, compared to days when the market has moved lower.

This could be an indication, but does not have to be, that long-term capital strong investors are a bit passive, and net buyers are in the market right now.

The problem with short-term investors, is that once they stop buying and long-term investors are not present, who will buy the market? In case technical support levels break, it will be of more interest to keep a closer eye on the development, as OMXS30 could be looking at increased volatility up ahead in such a case.

In the weekly chart below OMXS30 could be looking at strength, in case the index finds ground above technical resistance around 1660. In case the index does, during increased market activity well above 22-25 billion turnover per day, OMXS30 could be looking at more significant strength and potentially test resistance around previous all time high around 1720.