Hi Guys,
The Nasdaq 100 is fast approaching what may be a possible strong resistance zone.
The red highlighted box above is a zone I believe may prove hard to break through and could potentially see a proper retracement/ pullback from.
The red line in the box is the 1 fib extension of the covid low to bear market high to bear market low while the blue line is the 1.618 retracement of the bear market high to low. Both these fib levels are significant, especially due to the size of the moves from which they are calculated. These are levels that both retail and institutions will be looking at and could turn out to be an optimal trading zone.
The last time the Nasdaq was as extended from its 50 MA ( measuring from its most recent high to the 50MA) was June in 2023. A few weeks after that we had the top that led to a 3 month retracement and the lows in October from where we have been in this incredible bullish uptrend. We may see a similar set of circumstances unfold presently.
Daily RSI has dipped below the overbought region so a move back into overbought may create divergence which will be another strong clue as the divergence will be happening at a critical area. A fall back out from overbought after divergence generally gives a good area from which to look for sell setups.
If we pullback more from the current level and close below the current low, I will be looking to buy starting around the 19260 level (using fairly tight stop loss) and below that at 4hour demand zones/ previous resistance in anticipation of a rally up to the mentioned zone.
Safe trading all
The Nasdaq 100 is fast approaching what may be a possible strong resistance zone.
The red highlighted box above is a zone I believe may prove hard to break through and could potentially see a proper retracement/ pullback from.
The red line in the box is the 1 fib extension of the covid low to bear market high to bear market low while the blue line is the 1.618 retracement of the bear market high to low. Both these fib levels are significant, especially due to the size of the moves from which they are calculated. These are levels that both retail and institutions will be looking at and could turn out to be an optimal trading zone.
The last time the Nasdaq was as extended from its 50 MA ( measuring from its most recent high to the 50MA) was June in 2023. A few weeks after that we had the top that led to a 3 month retracement and the lows in October from where we have been in this incredible bullish uptrend. We may see a similar set of circumstances unfold presently.
Daily RSI has dipped below the overbought region so a move back into overbought may create divergence which will be another strong clue as the divergence will be happening at a critical area. A fall back out from overbought after divergence generally gives a good area from which to look for sell setups.
If we pullback more from the current level and close below the current low, I will be looking to buy starting around the 19260 level (using fairly tight stop loss) and below that at 4hour demand zones/ previous resistance in anticipation of a rally up to the mentioned zone.
Safe trading all
Note
On a side note if we use AB = CD will be same as the 1.618 retracement I have mentioned using covid low as point A , bear market high as point B , bear market low as point C ... D will be roughly in same area as the 1.618 retracement.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.