Battle of Historical Trends
Taking another view at NSDQ100 to support my previous linked ideas, now I look at the daily chart with a broader range, lest we miss the forest for the trees.
The zoomed-out daily chart provides important insight about the most powerful trend lines and there prominence, transformation, and demise. It is more suitable for longer-term outlooks, but it may also be useful for the few weeks to come, as I will show here.
There are 3 main trends here:
The main take away here is that the main trend of the post-covid19 surge, the purple one, started before COVID-19, which means that the fast growth was actually a resumption rather than a reaction. Yet, the purple trend itself started as a catch-up of the correction in 2019, and would have stopped, most probably, by the blue resistance had COVID-19 not happened. If that's correct, it would indicate all that is above the blue line as an over-buy that would demand correction at one point.
Employing a Fib Resistance Fan for each of the 2 lasting trends, however, suggests that we are in a middle ground. The dark red triangle formed by the intersection of both normal zones of the 2 fans is the Fibonnacci area with the least friction. As you can see, there is no room to follow the red resistance any more, so the red trend line would follow the purple one into oblivion. Meanwhile, the blue line coincides with the Fibonnacci support, which further confirms its prominence.
Based on this, I expect a fall soon to the blue support line (which is also at this point the lower Bollinger Band of the weekly chart) and then rise again.
The zoomed-out daily chart provides important insight about the most powerful trend lines and there prominence, transformation, and demise. It is more suitable for longer-term outlooks, but it may also be useful for the few weeks to come, as I will show here.
There are 3 main trends here:
- Blue: Started in 2016 and was historically the prominent resistance until 2018 and was denied in 2020 due to the premature market crash year and now is the main support.
- Purple: Started in 2019 and has been the main resistance for the post-covid19 surge. It's prominence ended with the last correction this year.
- Red: Started in 2020 and has been the main support of the post-covid19 surge. Now, it's the main resistance.
The main take away here is that the main trend of the post-covid19 surge, the purple one, started before COVID-19, which means that the fast growth was actually a resumption rather than a reaction. Yet, the purple trend itself started as a catch-up of the correction in 2019, and would have stopped, most probably, by the blue resistance had COVID-19 not happened. If that's correct, it would indicate all that is above the blue line as an over-buy that would demand correction at one point.
Employing a Fib Resistance Fan for each of the 2 lasting trends, however, suggests that we are in a middle ground. The dark red triangle formed by the intersection of both normal zones of the 2 fans is the Fibonnacci area with the least friction. As you can see, there is no room to follow the red resistance any more, so the red trend line would follow the purple one into oblivion. Meanwhile, the blue line coincides with the Fibonnacci support, which further confirms its prominence.
Based on this, I expect a fall soon to the blue support line (which is also at this point the lower Bollinger Band of the weekly chart) and then rise again.
Related publications
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.