Technical Analysis – NASDAQ 100 still in bullish mode

NASDAQ 100 index (US 100) still in bullish mode, but the correction may be close.

The NASDAQ 100 index continues to print higher highs and higher lows in the daily chart, running to fresh six-month highs ahead of the all-time high around 7700.

However, the technical indicators seem to be overstretched, suggesting a possible downward correction could be near. Specifically, the stochastic oscillator is hovering in the overbought zone, while the RSI has found resistance near the 70 level and is pointing down. Also, the MACD oscillator still stands above its trigger line with weaker momentum than before. It is worth mentioning that the 50- and 200-simple moving averages (SMA) completed a ‘golden cross’ in the near term, but the 200-SMA is still flattening.

If the bulls stay in control, the next resistance level to watch is the all-time high, before heading towards the psychological level of 8000.

On the other side, if momentum indicators prove that a bearish retracement is near, immediate support is coming from the 7510 level, while a move below that could see sellers challenging the 7250 level. Another sell-off could turn the bias to a more neutral one, opening the way for the 23.6% Fibonacci retracement level of the up leg from 5845 to 7606, near 7194, which coincides with the 50-day SMA.

Overall, the near-term picture remains cautiously positive, though a corrective pullback may be on the cards in the immediate term.

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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Source: XM