Nasdaq - Channel has been broken, a possible downfall to follow!
Yesterday, we stated that the rally was due to end and the bearish trend to resume. Then, a few hours later, the Nasdaq 100 index fell more than 5%. In the aftermarket, the selling continued; and in the early hours of futures trading, Nasdaq futures sold off as well. Then, the index (continuous futures - NQ1!) erased some of its losses and turned positive. At the moment, NQ1! trades around 11 920 USD. We expect a little bit of relief ahead of the U.S. market opening; however, our stance remains bearish, and we expect new lows in the Nasdaq 100 index. Therefore, we would like to set a new short-term price target for QQQ at 285 USD and the medium-term price target at 280 USD (it will become the short-term price target after hitting 285 USD).
We think what highlights yesterday's selloff is that no significant headlines were made in the news, and despite that, the stock market fell by an astounding amount. Market participants can observe that anxiety and fear are extremely high, which leads to strong price actions to the upside. However, these bounces tend to last shortly and are quickly followed by massive selloffs. These are particular signs of the bear market.
In addition to that, we would like to note the downward moving channel has been broken yesterday - which we expect to culminate in the acceleration of the selling pressure.
Illustration 1.01
The picture shows NQ1! (Nasdaq continuous futures). It can be observed that buyers did not manage to push the price through the sloping resistance; a breakdown in the price of the index followed.
Technical analysis - daily time frame
RSI, MACD, and Stochastic are all bearish again. DM+ and DM- are bearish too. A move up by the ADX suggests that the bearish trend has resumed. Overall, the daily time frame is very bearish.
Technical analysis - weekly time frame
RSI, MACD, and Stochastic are all bearish. The same applies to DM+ and DM-. ADX increases. Overall, the weekly time frame remains bearish.
Please feel free to express your 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. Therefore, your own due diligence is highly advised before entering a trade.
We think what highlights yesterday's selloff is that no significant headlines were made in the news, and despite that, the stock market fell by an astounding amount. Market participants can observe that anxiety and fear are extremely high, which leads to strong price actions to the upside. However, these bounces tend to last shortly and are quickly followed by massive selloffs. These are particular signs of the bear market.
In addition to that, we would like to note the downward moving channel has been broken yesterday - which we expect to culminate in the acceleration of the selling pressure.
Illustration 1.01
Technical analysis - daily time frame
RSI, MACD, and Stochastic are all bearish again. DM+ and DM- are bearish too. A move up by the ADX suggests that the bearish trend has resumed. Overall, the daily time frame is very bearish.
Technical analysis - weekly time frame
RSI, MACD, and Stochastic are all bearish. The same applies to DM+ and DM-. ADX increases. Overall, the weekly time frame remains bearish.
Please feel free to express your 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. Therefore, your own due diligence is highly advised before entering a trade.
Trade active:
The post was updated in the following idea: www.tradingview.com/...-the-futures-market/
Trade closed: target reached:
Our price target of 285 USD was hit.
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