Chart of the day - Nasdaq 100 pull backed towards key inflection zone

Nasdaq 100 pull-backed towards key inflection zone at 6820/790 where a potential recovery may occur

Short-term technical outlook on US Tech 100 Index (Thurs, 01 Mar)



Key technical elements

  • The recent decline 2.3% seen in the US Tech 100 Index (proxy for the Nasdaq 100 futures) from its Tues, 27 Feb high of 7003 has reached a significant inflection zone of 6820/790 which is defined by a confluence of elements. The former minor range resistance of 21/23 Feb now turns pull-back support at 6820 and a Fibonacci cluster at 6790 (the 23.6% retracement of the up move from 09 Feb 2018 U.S. session low to 27 Feb 2018 high & the 1.618 projection of the recent down move from 27 Feb high to 28 Feb Asian session low projected from 28 Feb U.S. session high) (see daily & 1 hour charts)
  • The daily RSI oscillator has continued to hover above the 50% level without any bearish divergence signal. In addition, the shorter-term hourly Stochastic oscillator has traced out a bullish divergence signal at its oversold region. These observations suggest that the recent downside momentum of price action has started to abate.
  • The intermediate resistance stands at 6950 which is defined by the upper boundary of a minor “bullish flag” continuation pattern in place since 27 Feb 2018 high.
  • The resistance after its current all-time high of 7038 stands at the 7115/150 zone which is defined by a Fibonacci projection cluster (see 1 hour chart).

Key Levels (1 to 3 days)

Pivot (key support): 6820/790

Resistances: 6950, 7038 & 7115/150

Next support: 6690

Conclusion

The Index has reached an inflection zone where another round of potential upleg may materialise. As long as the 6820/790 pivotal support holds and a break above 6950, the Index is likely to stage a potential push up to retest its current all-time high level of 7038 and above it opens up scope towards 7115/150 next.

However, a break below 6790 should invalidate the recovery scenario for deeper slide towards the next support at 6690 (swing low areas of 16/22 Feb 2018 + 38.2% Fibonacci retracement of the on-going medium-term up move from 09 Feb 2018 U.S session low to 27 Feb 2018 high.

Charts are from City Index Advantage TraderPro 



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