The last Friday, the Nasdaq 100 index failed to move below the short-term support at 12 442.50 USD. That highly raises the odds of a bear market rally continuing further. A breakout above the short-term resistance will suggest the index will test the next resistance level at 13 555.25 USD. Despite that, we do not foresee any changes to bearish fundamental factors. Therefore, we have no reason to change our medium and long-term bearish outlook on NQ1!. However, we are indecisive about where the market is headed next in the short term. Therefore, we are very cautious, and we will monitor the price action (and volume) throughout the day.
Technical analysis - daily time frame RSI is neutral. MACD is bullish but in bearish territory. Stochastic oscillates in the bullish area. DM+ and DM- are bullish; however, ADX shows the trend is turning neutral. Overall, the daily time frame is neutral.
Illustration 1.01 The picture shows the failure of the NQ1! to make a new low below the short-term support.
Technical analysis - weekly time frame RSI points to the upside; however, its bearish structure remains intact. Stochastic oscillates in the bearish area. MACD is flattening. DM+ and DM- are bearish. Overall, the weekly time frame is bearish.
Illustration 1.02 The choppy price action forms the neutral zone between short-term support and short-term resistance.
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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. Therefore, your own due diligence is highly advised before entering a trade.
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Price action continues to be choppy; however, a new low was formed (for this week).