Nasdaq 100 - Confirmation or invalidation of the bottom

11 thg 3, 2022

On 24th February 2022 the Nasdaq 100 index plunged to as low as 13 025.75 USD. Then on 3rd March 2022 it saw a rebound to 14 391 USD; and then on 8th March 2022 NQ1! started falling again before halting its decline at 13 103.25 USD. Shortly after, this was followed by another rebound in price of NQ1!. We think market participants are growing increasingly anxious as volatility remains highly elevated and FOMC is coming closer by each day. We think it is likely for the market to mute down a little bit ahead of an important FED's meeting. FED is projected to increase interest rates by 25 basis points on 16th March 2022. If FED manages to deliver its promises then we think it is likely for the general stock market to follow through with further weakness and selling pressure.

Technical analysis - daily time frame
RSI is neutral. Same applies to MACD which, however, still remains in bearish territory. If MACD manages to break above 0 points then we expect it to bolster the bullish case for Nasdaq 100 index. Stochastic points to the upside which is bullish. DM+ and DM- are bearish. ADX exhibits growth which suggests the bearish trend is either near its peak or it is gaining more strength. Overall, the daily time frame is neutral.

Illustration 1.01

Picture above shows the daily chart of NQ1!. Previously we noted it is possible that the Nasdaq 100 index has bottomed out. We will observe its price action next week and we will look for possible confirmation or invalidation of our thesis.

Technical analysis - weekly time frame
RSI and MACD continue to develop their bearish structures which is negative for NQ1!. Stochastic oscillates in the bearish territory, however, it managed to reverse to the upside which is positive. DM+ and DM- show bearish conditions in the market; ADX increases which suggests the prevailing trend is gaining further strength or it nears its peak. Overall, the weekly time frame is bearish.

Support and resistance


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.