Are we about to see an end to the summer stock market rally?
Or can this U.S. equity index sustain the ongoing uptrend?
Here’s an area of interest I’m watching on the Nasdaq:
Nasdaq 100 (NAS100): 4-hour
Nasdaq 100 (NAS100) 4-hour Chart
Check out this neat textbook correction play lining up on the 4-hour chart of the Nasdaq!
Is the trend still our friend?
I’m keeping a close eye on how this tech-heavy index reacts to the ascending trend line that’s been holding for a couple of months already.After all, this potential floor lines up with the 50% Fibonacci retracement level and a former resistance level that might hold as support.
Technical indicators like the moving averages and Stochastic are hinting at a continuation of the rally. The 100 SMA is safely above the 200 SMA to reflect bullish pressure while the oscillator is indicating exhaustion among sellers.
Also, the 200 SMA dynamic support lines up with the area of interest around 12,800-13,000 to add to its strength as a floor.
If stock market bulls charge around these levels, the index could make its way back up to the swing high and beyond!
On the other hand, a break lower could confirm “bear trap” warnings, especially with a couple of top-tier U.S. data releases lined up.
In particular, investors are watching out for the preliminary U.S. GDP that might contain notable revisions to the previously reported contraction. Later on, the core PCE price index (a.k.a. Fed’s preferred inflation measure) is due, likely affecting interest rate expectations.
Just make sure you manage your risk properly during volatile market periods, so you can stay in the game and dodge any traps!
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.
