Chart of the day - Nasdaq 100 continues to evolve in a potential bullish configuration

Bulls in Nasdaq 100 need to break above 7008

Short-term technical outlook on US Tech 100 (Fri, 01 Jun)

Key technical elements

  • The medium-term uptrend for the US Tech 100 Index (proxy for the Nasdaq 100 futures) remains intact since 04 Apr 2018 low of 6295 as per highlighted by the green ascending channel (see 4 hour chart).
  • Despite the on-going trade tensions between U.S. and EU, Canada, Mexico over the steel/aluminium tariffs that U.S. administration has planned to start imposing today after the temporary exemptions ended, the Index has managed to shrug off this negative news flow and reversed its initial losses seen in yesterday, 31 May U.S. session to trade back up close to a minor range resistance of 7008 that has capped its upside since 14 May 2018 (see 4 hour chart).
  • Since 14 May 2018, the Index has evolved into an impending minor bullish continuation “Ascending Triangle” range configuration with its resistance at 7008 and support coming in at 6925. In addition, the daily RSI remains positive above its first support at the 55 level with the shorter-term 4 hour Stochastic oscillator that has started to inch upwards and still has room to manoeuvre to the upside before it reaches an extreme overbought level. Overall, positive momentum readings.
  • The next key short-term support will be at 6853/23 as defined by the lower boundary of the medium-term ascending channel (in green), the former medium-term swing high of 18 Apr 2018 and close to 23.6% Fibonacci retracement of the up move from 25 Apr 2018 low to 14 May 2018 high.
  • The significant resistance stands at the 7186/7209 zone which is defined by the current all-time high seen in 13 Mar 2018, the upper boundary of the medium-term ascending channel and a Fibonacci projection cluster.

Key Levels (1 to 3 days)

Intermediate support: 6925

Pivot (key support): 6854/23

Resistances: 7008 (upside trigger) & 7186/7209

Next support: 6600


Therefore, as long as the 6854/23 key pivotal support holds and a break above 7008 (an hourly close above it) is likely to open up scope for another round of impulsive upleg for the Index to target the next resistance at 7186/7209.

On the other hand, a break below 6854/23 shall negate the bullish tone for a steeper decline towards the lower limit of a major support zone at 6600 (the lower boundary of longer-term primary ascending channel from Jun 2016 low & the 61.8% Fibonacci retracement of the up move from 04 April 2018 low to 14 May 2018 high).

Charts are from City Index Advantage TraderPro

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