Chart of the day Nasdaq 100 remains in a bullish extension phase

Short-term technical outlook on US Tech 100 Index (Tues, 16 Jan)



Key technical elements

  • The Index has staged a bullish breakout from its former ascending channel’s upper boundary/resistance (depicted in brown) which implies that it is likely undergoing a bullish extension/acceleration phase.
  • There is still no clear signs of medium-term bullish exhaustion as the daily RSI oscillator has not flash any bearish divergence signal and still has room  to stage a further potential push up towards a recent extreme overbought level at 84% seen in Feb 2017.
  • The next near-term significant resistances stand at 6860 and 6900 which is defined by the minor ascending channel from 30 Dec 2017 (depicted in light green) and a Fibonacci projection cluster (see daily & 1 hour charts).
  • In the short-term, the Index may see a minor pull-back towards the 6745 support (lower boundary of the aforementioned minor ascending channel as the hourly Stochastic oscillator has just exited from its overbought region.
  • The key short-term support rests at 6690/74 which is defined by the pull-back support of the ascending channel former upper boundary from 26 Sep 2017 and the former minor swing high area of 09 Jan 2018.

Key Levels (1 to 3 days)

Intermediate support: 6745

Pivot (key support): 6690/74

Resistances: 6860 & 6900

Next support: 6620

Conclusion

The Index may stage a minor pull-back first towards 6745 and as long as the 6690/74 key pivotal support holds, the Index is likely to resume its bullish impulsive upleg to target the next resistances at 6860 follow by 6900 next.

On the other hand, failure to hold above 6674 should negate the bullish tone to see a deeper corrective pull-back towards the next support at 6620 (minor swing low of 10 Jan 2018 & the 38.2% Fibonacci retracement of the recent up move from 30 Dec 2017 low to yesterday, 15 Jan high).

Charts are from City Index Advantage TraderPro 


Join our live webinars for the latest analysis and trading ideas. Register now

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.

For further details see our full non-independent research disclaimer and quarterly summary.