Thursday, February 25, 2021

Minor Correction Forward Amid an Ascending Channel?

Nasdaq 100 index Technical Forecast: Bearish

  • The Nasdaq 100 index hit an all-time excessive of 13,879 earlier than getting into right into a minor correction
  • Costs stay inside an “Ascending Channel”, with 20-Day SMA serving as a right away help
  • The MACD indicator has shaped a bearish crossover, suggesting that momentum has turned bearish
Equities Forecast

Equities Forecast

Really helpful by Margaret Yang, CFA

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The Nasdaq 100 index reached its all-time excessive of 13,879 on February 16th earlier than getting into a consolidative interval. The formation of two lengthy bearish candlesticks nevertheless trace at robust promoting strain as costs failed to interrupt a key resistance stage of 13,865 – the 161.8% Fibonacci extension. The index seemed to be overstretched after surging practically 26% from early November to mid-February, rendering it weak to a technical pullback when profit-taking actions kick in.

A right away help stage will be discovered on the 20-Day Easy Transferring Common line (13,530). Breaking under this stage could result in additional losses with a watch on 13,362, the place the 127.2% Fibonacci extension and the decrease sure of the “Ascending Channel” intercept. A good deeper pullback under 13,362 could trace at a near-term development reversal and thus open the door for additional draw back potential in the direction of the 50-Day SMA line (13,190) for help.

The general development stays bullish-biased, as prompt by upward-sloped transferring averages in addition to the “Ascending Channel”. Close to-term momentum seems biased in the direction of the draw back after the formation of a bearish MACD crossover nevertheless.

Nasdaq 100 Index – Each day Chart

Nasdaq 100 Chart

Chart by IG

On the weekly foundation, the Nasdaq 100 index pocketed an astonishing achieve of 107% from late March 2020 till early February 2021(chart under). The general development stays bullish-biased, with current consolidation doubtlessly paving the best way for larger highs in the direction of the 200% Fibonacci extension stage (14,400). Costs are properly supported by 4-, 10- and 20-period SMA strains, suggesting that the medium-term bull development stays intact.

Nasdaq 100 Index – Weekly Chart

Nasdaq 100 Weekly Chart

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— Written by Margaret Yang, Strategist for DailyFX.com

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