Short-term technical outlook on Nasdaq 100 (Thurs, 31 Jan)
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Key technical elements
- The US Tech 100 Index (proxy for the Nasdaq 100 futures) has managed to clear above the 6800 former minor range resistance in place since 18 Jan 2019.
- The Index has continued its upward climb since its 26 Dec 2018 swing low area of 5873/803 which implies a 5-week consecutive positive up move within a minor bearish “Ascending Wedge” range configuration (see daily chart).
- The upper boundary of the minor “Ascending Wedge” stands at 6975/7020 which also confluences with a Fibonacci retracement/expansion cluster (61.8% retracement of the recent decline from 01 Oct 2018 all-time high of 7700 to 26 Dec 2018 low & 0.618 expansion of the on-going rebound from 26 Dec 2018 low to 09 Jan 2019 low projected from 14 Jan 2019 high.
- The 1-hour Stochastic oscillator has started to exit from its overbought region and still has further room to manoeuvre to the downside before it reaches an extreme oversold level. This observation suggests that the Index may see a pull-back at this juncture to retest yesterday’s bullish breakout for the minor range resistance at 6800.
- The key short-term support rests at 6710 which is defined by a Fibonacci retracment cluster and the lower boundary of the minor “Ascending Wedge”.
Key Levels (1 to 3 days)
Intermediate support: 6800
Pivot (key support): 6710
Next support: 6600
If the Index manages to hold at the 6710 key short-term pivotal support, it may stage a potential final push up to target the key medium-term resistance at 6975/7020.
However, a break below 6710 negates the bullish tone for a deeper pull-back to retest the 6600 minor range support at 6600 (17/29 Jan 2019 swing low areas).
Charts are from City Index Advantage TraderPro
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