Chart of the day - Nasdaq 100 pull backed towards key short term inflection zone
Kelvin Wong June 19, 2018 11:06 AM
Nasdaq 100 now right above key short-term support zone of 7135/7075 where a potential recovery may occur.
Short-term technical outlook on US Tech 100 (Tues, 19 Jun)
Key technical elements
- The on-going 2.1% decline from its current all-time high level of 7292 on the US Tech 100 Index (proxy for the Nasdaq 100 futures) is now hovering above a key short-term support zone of 7135/7075.
- The aforementioned 7135/7075 key short-term support is defined by a confluence of multiple elements. The minor swing low area of 08 Jun 2018, 23.6% Fibonacci retracement of the up move from 25 Apr 2018 low to the current all-time high level of 729 and minor ascending trendline from 25 Apr 2018 low.
- The daily RSI oscillator is now coming hovering above a significant corresponding support at the 60/50 level coupled with an impending bullish divergence signal seen in shorter-term 4 hour Stochastic oscillator. These observations suggest that the recent downside momentum of price action is “overstretched”.
- The intermediate resistance stands at 7255 (the minor descending trendline that has capped prior rebound since 15 Jun 2018) follow by the significant medium-term resistance of 7340/400 (the upper boundary of the medium-term ascending channel in place since 04 Apr 2018 & a Fibonacci projection cluster (see 4 hour chart).
Key Levels (1 to 3 days)
Intermediate support: 7135
Pivot (key support): 7075
Resistances: 7255 & 7340/400
Next support: 6854 (medium-term pivot)
Therefore as long as the 7075 key short-term pivotal support holds, the Index may see a push up to retest the 7255 intermediate support and an hourly close above 7255 is likely to open up scope for a potential fresh upleg to target the next resistance at 7340/400.
On the flipside, failure to hold at 7075 put the bulls on hold for an extension of the corrective pull-back to test the 6854 key medium-term pivotal support (the former swing high area of 19 Apr 2018 that has managed to hold the previous pull-back on 23 May 2018 & the lower boundary of the medium-term ascending channel from 04 Apr 2018).
Charts are from City Index Advantage TraderPro
StoneX Financial Ltd (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.