WALL STREET : DJIA Rebound On Cooling Oil and Gold

Blue Chips Rallied 124 points Led By Bank of America

Stocks bounced back today from Monday's drubbing, with cooling crude prices offering shaken investors a ray of hope. The front-month oil contract retreated from its recently tagged 29-month peak after unsubstantiated reports indicated that embattled Libyan dictator Muammar Gaddafi may be looking for an opportunity to step down. The bulls also found another unlikely source of inspiration: Dow component Bank of America (BAC). At the company's first investor day since 2007, CEO Brian Moynihan offered a surprisingly upbeat long-term profit forecast, and added that B of A hopes to return some capital to shareholders via special dividends and stock buybacks. As a result, the blue chip bank led the Dow Jones Industrial Average (DJIA) to an impressive 124-point gain.

The Dow Jones Industrial Average (DJIA – 12,214.38) lapsed into a bit of an intraday coma after skyrocketing to an early triple-digit advance, with the index bouncing between 12,210 and 12,250 throughout the afternoon. The Dow eventually closed on a gain of 124.4 points, or 1.03%, as all but three of its 30 components ended higher. Bank of America led the advancing blue chips with a 4.7% rise, while McDonald's (MCD) set the tone for the three laggards after a lackluster February sales report. Thanks to today's rally, the Dow settled atop its 20-day moving average for the first time since March 3.

The S&P 500 Index (SPX – 1,321.82) also ended solidly higher, adding 11.7 points, or 0.9%. However, the SPX settled just a hair's breadth below its own 20-day trendline. Finally, the Nasdaq Composite (COMP – 2,765.77) managed a comparatively modest advance of 20.1 points, or 0.7%, but reclaimed a foothold above its 10-day moving average in the process.

TECHNICAL ANALYSIS
Dow Jones Industrial Average
The Dow closed higher on Tuesday and the high-range close sets the stage for a steady to higher opening on Wednesday.

Stochastics and the RSI are neutral to bullish signaling that sideways trading is possible near-term.

Closes below the reaction low crossing at 11,983 are needed to confirm that a short-term top has been posted. If the Dow extends the rally off the reaction low, February's high crossing at 12,391 is the next upside target.
 

First resistance is February's high crossing at 12,391.

Second resistance is the January 2008 high on the weekly continuation chart crossing at 12,767.
First support is the reaction low crossing at 11,983.

Second support is the reaction low crossing at 11,803.

HAPPY TRADING