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

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)

Conclusion

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




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