- The market has been trading above a bullish trendline since end of October, the long-term-trend was therefore bullish.

- However, as previously discussed in our previous analysis, we could notice that the trend was slowing down has newer tops were registered with less and less strength.
Following a new historical high at 18,425.0pts, investors' appetite for Tech stocks as decreased. This happened mostly because of take profit moves following a strong market rally, while traders also wait for further bullish catalysts that could be brought by the start of another monetary easing cycle in the US.

In any case, since the last top, prices have pulled back towards their first available support around 17,840.0pts, which led to a breakout of the long-term bullish trendline, invalidating the trend.
The Bollinger Bands are reversing to the downside but remain tight, while the DMI indicator shows an increasing bearish pressure without clear directionality in the price action.

- According to what Technical Analysis tells us, the bullish trend is no longer valid. However, the fact that the Bollinger Bands don't show any increased volatility, while the DMI indicates no directionality in the current movement tends to make a bearish reversal not the most likely scenario for the Nasdaq.
A lateral consolidation, or even flag pattern correction is our preferred scenario so far.
The 17,655pts/17,840pts can be seen as a strong support level for the market, and could be an interesting zone for long-term investors.
Not to mention that there is no real threat from a macro-economic standpoint for the market.

Pierre Veyret, Technical Analyst at ActivTrades

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