Chart of the day - Nasdaq 100 pull backed towards key inflection zone
Kelvin Wong March 1, 2018 10:54 AM
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
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
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.