General stock market continues to experience weakness. Nasdaq 100 declined to a new low at 14 602.25 USD while subsequently reaching our two price targets. Because of that we decided to update our thoughts on this index. We continue to maintain a bearish stance on NQ1!. Our view is supported by technical factors which continue to point to the downside. However, we have to note the price of NQ1! experienced fast and steep decline along which it deviated too far from its 10-day SMA (Simple Moving Average) and 20-day SMA. Because of that we would not be surprised to see price retracement towards these two moving averages in the following days. Though, if volatility will continue to increase (at its current pace) then it is likely that full retracement will not occur, half retracement is more probable. Because of our bearish view we would like to set a new short-term price target for NQ1! to 14 500 USD. Additionally, our medium-term price target for NQ11! is 14 250 USD.
Illustration 1.01 Picture above shows the daily chart of NQ1! with volume indicated below it (green and red bars). Volume remains relatively high with no signs of decline. This suggests that selling pressure will most likely remains persistent for while.
Technical analysis - daily time frame RSI crossed below 30 points into oversold territory. MACD and Stochastic remain bearish. DM+ and DM- continue to show bearish conditions in the market. ADX increases which suggests that the bearish trend is gaining strength. Overall, the daily time frame is bearish. However, it also signals the price got oversold relative to its short-term past which often precedes short lived bounce in price.
Technical analysis - weekly time frame RSI, Stochastic, DM+ and DM- are bearish. MACD is bearish too despite the fact that it appears in the bullish zone. ADX stopped its decline and reversed to the upside which suggests the new bearish trend gains strength. Overall, the weekly time frame remains bearish.
Support and resistance Short-term resistance sits at 14 807.50 USD and short-term support lies at 14 585.50 USD. Support 1 appears at 14 367.75 USD and Resistance 1 appears at 15 708.75 USD. Major resistance is at 16 767.50 USD which is all time high for NQ1!.
Please feel free to express your own ideas and thoughts in the comment section.
Our latest thought on NQ1! from 18th January 2021.
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 closed: target reached
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Our short-term price target of 14 500 USD has been reached today. We would like to change medium-term price target of 14 250 USD to short-term price target.
Trade closed: target reached
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Short-term price target of 14 250 USD has been reached. Our new short-term price target is 14 000 USD. Our new medium-term price target for NQ1! is 13 750 USD.
Trade closed: target reached
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Our new short-term price target of 14 000 USD has been reached. We change medium-term price target of 13 750 USD to short-term.
Trade closed: target reached
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Our latest short-term price target of 13 750 USD was also reached.
You think support 1 will hold? In previous analysis your support 2 failed, is it same probability of fail for this support 1? What you think contributes to the risks, for example russian army at ukraine's border, risk that FED increase interest rate etc, what are the factors in real world you look at?
Tradersweekly
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@erfrerdbackup, As indicated by the latest price target I think price will continue to 14 250 USD. Then I will reasses situation and add new update on Nasdaq. But at this point I think Nasdaq will continue lower. Though, at the moment, the price remains very far from its short-term moving average which suggests that price bounce might preceed further move lower. Overall I remain bearish at this point. Lets see what FOMC will bring. I personally look mainly on interest rates and quantitative easing as these two are main driving forces for the market (+ of course some fiscal policies like stimulus and tax cuts have great influence too). But besides that I am mostly technical trader so to news I attribute maximum of 15% weight (as in regards to decision making). I hope this helps. If you have more questions feel free to ask.
dualmass
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14k is the bottom....pick a stock Ill give you a bottom, this week will be brutal and historic
Tradersweekly
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@dualmass, Alright, lets see what happens during the week (especially after FOMC). Where do you see bottom for Apple Inc (Ticker: AAPL)?
dualmass
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@Tradersweekly, 150 looks like a possible entry, there are better trades than apple coming soon in the tech world,