Chart of the day - Nasdaq 100 pull backed towards key medium term support

The Nasdaq 100 futures is now hovering above its key medium-term support at 6745.

Short-term technical outlook on US Tech 100 (Wed, 23 May)

Key technical elements

  • The US Tech 100 Index (proxy for the Nasdaq 100 futures) has continued to tumble in today, 23 May Asian/European sessions reinforced by U.S President Trump’s “lukewarm” comments on U.S./China trade relations where he was not happy with the recent trade talks and added that U.S. may opted out in the upcoming U.S./North Korea Summit in June. The Index has pull-backed by 1.8% from its recent minor high of 6948 seen yesterday, 22 May to print a current intraday low of 6823 in today, 23 May European session.
  • The Index is now hovering just above the 6745 key medium-term support which is defined by a confluence of elements. The lower boundary of an ascending channel from 04 Apr 2018 low, the former minor swing high area of 27 Apr 2018 and a Fibonacci cluster (50% retracement of the recent up move from 03 May low to 14 May 2018 high & 1.00 projection of the on-going pull-back from 14 May high to 15 May low projected from yesterday, 22 May high of 6948) (see 4 hour chart).
  • There are no clear signs of a medium-term bullish exhaustion in price action as indicted by the daily RSI oscillator where its current decline has not been accompanied by a bearish divergence signal. In addition, the 4 hour Stochastic oscillator has reached its extreme oversold level at 3%. These observations suggest that the recent decline from 14 May 2018 high of 7007 is likely a minor corrective pull-back within a medium-term up trend in place since 04 Apr 2018 low rather than a trend reversal where the on-going pull-back is being “overstretched”.

Key Levels (1 to 3 days)

Intermediate support: 6800

Pivot (key support): 6745

Resistances: 6870 (upside trigger), 6950 & 7000

Next support: 6530


Therefore, as long as the 6745 key medium-term pivotal support holds and a break above 6870 may see a recovery to retest the intermediate resistances at 6950 follow by 7000 in the first step.

However, failure to hold at 6745 shall invalidate the medium-term uptrend to kick start another round of choppy decline towards the next support at 6530 (the lower boundary of the major primary ascending channel from Jun 2016 low.

Charts are from City Index Advantage TraderPro

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