Technical analysis update: Nasdaq (18th January 2022)

In our latest idea on NQ1! we outlayed the bearish case for it. Since then NQ1! bounced back above the key technical level at 15 538 USD only to drop back below it later. Currently, NQ1! trades near 15 300 USD price tag. We continue to maintain bearish notion on the Nasdaq index. Our view is supported by a combination of bearish technical and fundamental factors. Technical analysis on both the daily and the weekly time frames suggest that selling pressure will be persistent for a while. The monthly time frame is turning bearish as well which sends warning to investors. Additionally, we expect turmoil in the Asian markets, particularly in China, to be contagious to the U.S. stock market which will culminate in further selloff. Our short-term price target remains 15 000 USD.

Illustration 1.01

Illustration above shows the daily chart of NQ1! and key technical level.

Technical analysis - daily time frame
RSI, MACD and Stochastic are all bearish. In addition to that, DM+ and DM- show bearish conditions in the market with ADX increasing which suggests the bearish trend is gaining strength. Overall, the daily time frame is very bearish.

Illustration 1.02

Chart above shows the monthly graph of NQ1!. It also shows steepening trend lines with the steepest one being broken recently. This is a very bearish occurrence which signals cautiousness to investors.

Technical analysis - weekly time frame
RSI, MACD and Stochastic are all bearish as on the daily time frame. DM+ and DM- are also bearish with ADX undergoing reset. Overall, the weekly time frame is bearish.

Support and resistance
Immediate support/resistance sits at 15 538 USD while major top lies at 16 767.50 USD. Support 1 can be found at 15 273.75 USD and Support 2 at 14 585.50 USD.

Please feel free to express your own ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.

Trade active:

We would like to set medium-term price target for NQ1! to 14 750 USD.

Trade closed: target reached