US100 - Testing Key Resistance: Will the 4H Trend Reverse?Market Structure & Trend Overview
The Nasdaq (US100) has been in a 4-hour uptrend, forming a series of higher lows and respecting an ascending channel after a prolonged bearish trend. This structure suggests that buyers are stepping in, and momentum may be shifting in favor of the bulls. However, the index remains at a critical decision point that could determine whether we see a confirmed bullish reversal or a continuation of the larger downtrend.
Key Zone: 4H Imbalance & Resistance Area
Currently, price action is testing a 4-hour imbalance zone, which has already acted as a strong resistance level twice. The market is struggling to break through this supply zone, which is crucial in determining the next major move. If price tests this area again and successfully breaks above it, it could confirm that buyers have gained control, signaling a potential trend reversal back into a bullish phase.
However, if price gets rejected from this level again, it could indicate that sellers are still dominant, increasing the probability of a breakdown from the ascending channel and a resumption of the bearish trend.
Bullish Scenario: Break & Hold Above Imbalance Zone
For a confirmed bullish reversal, Nasdaq must break above the imbalance zone with strong volume and sustain price action above it. A successful breakout could attract more buyers, leading to a push towards higher resistance levels, possibly targeting the $20,000 - $20,300 range in the short term.
Signs to look for in a bullish breakout:
✅ A decisive close above the imbalance zone with strong bullish momentum.
✅ Retesting the broken level as support, confirming it as a new demand zone.
✅ A continuation of higher highs and higher lows after the breakout.
Bearish Scenario: Breakdown of the Ascending Channel
If price fails to break through the imbalance zone and instead rejects for the third time, this could indicate a weakening bullish structure. The key support to watch is the lower boundary of the ascending channel. A confirmed break below this channel could invalidate the short-term uptrend, signaling a return to bearish price action.
If this occurs, Nasdaq could drop towards the key support level at $19,146, a previous liquidity zone where buyers may step in again.
Signs to watch for a bearish breakdown:
❌ A clear rejection from the imbalance zone.
❌ A break and close below the ascending channel.
❌ Increased selling pressure and a shift in market sentiment.
Final Thoughts: A Critical Inflection Point
Nasdaq is at a pivotal moment where the next move will determine the broader trend direction. If bulls can push price above the imbalance zone, we could see a confirmed bullish reversal with upside potential. However, if sellers regain control and force a breakdown of the channel, the downtrend is likely to continue, targeting the $19,146 level as a potential support zone.
Traders should closely monitor price action at the imbalance zone and the ascending channel boundaries, as these key areas will dictate the next major move. Whether we see a trend reversal or continuation, this setup presents significant trading opportunities in either direction.
Key Levels to Watch:
📍 Bullish Breakout Target: $19,900 - $20,000
📍 Bearish Breakdown Target: $19,146
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