Chart of the day- Nasdaq 100 no clear signs of bullish exhaustion yet

Short-term technical outlook on US Tech 100 Index (Wed, 25 Jan)



Key technical elements

  • Yesterday’s slide of 1.6% seen in the U.S. session triggered by the risk of a global trade war as recent trade polices from the U.S. administration  had been tilted towards a protectionist “America First” stance. However, technical backdrop remains the same  as the US Tech 100 Index (proxy for the Nasdaq 100 futures) is still evolving in a bullish acceleration phase in place since 30 Dec 2017 low.
  • The daily RSI oscillator remains positive above its first support at the 70% level without any bearish divergence signal as it hover just below a recent  extreme overbought level of 84% seen in Feb 2017. These observations suggest no clear signs of medium-term bullish exhaustion in upside momentum of price action.
  • The key short-term support now stands at 6877 which is defined by the lower boundary of a minor ascending channel from 10 Jan 2018 low (depicted on light green & the close to the 23.6% Fibonacci retracement of the recent up move from 10 Jan 2018 low to current all-time high seen on 24 Jan 2018).
  • The next significant near-term resistance stands at 7020 which is defined by the upper boundary of the aforementioned minor ascending channel and the 0.382 Fibonacci projection of the up move from 10 Jan 2018 low to 24 Jan 2018 high projected from yesterday U.S session low.

Key Levels (1 to 3 days)

Intermediate support: 6915

Pivot (key support): 6877

Resistances: 7020 & 7100/135

Next support: 6720

Conclusion

The short-term uptrend from 10 Jan 2018 low remains intact. Thus, as long as the 6877 short-term pivotal support holds, the Index is likely to stage another potential upleg to target the next resistance at 7020 and above it opens up scope for a further rally towards 7100/135 (Fibonacci projection cluster).

However, failure to hold above 6877 should negate the bullish tone to trigger a deeper minor corrective pull-back towards the medium-term support of 6720 (pull-back support of the former ascending channel resistance from 26 Sep from 2017 & the swing low area of 17 Jan 2018).

Charts are from City Index Advantage TraderPro 


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