The Nasdaq composite took a sharp dive yesterday as tech stocks continue to reel from growing inflation fears. The newly developing downtrend is likely to probe even lower in the near future as the global recovery heats up.
This downtrend is emerging from the Double Top pattern just above the psychologically significant resistance level at 14000.00. Moreover, the breakdown occurred from an Ascending Wedge pattern, making it an even more prominent bearish movement.
The price action went on to break down below the resistance-turned-support level at 13550.00, which represents yet another major bearish indication.
Notice that the initial breakdown (below the Wedge) was held back by the 100-day MA (in blue). Afterwards, the price action established a throwback to the lower end of the Wedge from below.
Once the downturn was renewed, the price action penetrated below 13550.00 and is currently testing the 200-day MA (in orange). This floating support represents the last potential turning point for the downtrend, making it a last resort for the bulls.
Unless a major rebound takes place immediately, the price of the Nasdaq may fall as low as the next major support at 12800.00, or even the 23.6 per cent Fibonacci retracement level at 12284.99, before the IXIC finds the necessary support.
At present, there doesn't seem to be any potential catalyst in sight that could prompt such a rebound.
This downtrend is emerging from the Double Top pattern just above the psychologically significant resistance level at 14000.00. Moreover, the breakdown occurred from an Ascending Wedge pattern, making it an even more prominent bearish movement.
The price action went on to break down below the resistance-turned-support level at 13550.00, which represents yet another major bearish indication.
Notice that the initial breakdown (below the Wedge) was held back by the 100-day MA (in blue). Afterwards, the price action established a throwback to the lower end of the Wedge from below.
Once the downturn was renewed, the price action penetrated below 13550.00 and is currently testing the 200-day MA (in orange). This floating support represents the last potential turning point for the downtrend, making it a last resort for the bulls.
Unless a major rebound takes place immediately, the price of the Nasdaq may fall as low as the next major support at 12800.00, or even the 23.6 per cent Fibonacci retracement level at 12284.99, before the IXIC finds the necessary support.
At present, there doesn't seem to be any potential catalyst in sight that could prompt such a rebound.
