Technical Analysis of NASDAQ 100 Index (4-Hour Chart)
Key Support and Resistance Levels
Key Support Levels:
The 20,566 level serves as the current support zone. This level is critical for determining the future direction of the index.
If this level is breached, the next support lies around 20,250.
Key Resistance Levels:
The first resistance zone is between 21,329-21,381, which aligns with the 20-period moving average and acts as a significant hurdle for upward movement.
Upon breaking this resistance, the next target is around 22,106, corresponding to the upper band of the Bollinger Bands indicator.
Potential Scenarios
1. Bullish Scenario:
If the price rebounds from the 20,566 support zone, the index is expected to initially move towards the 21,381 resistance level. A successful breakout of this level could push the index toward its next target at 22,106. Confirmation signals, such as bullish patterns or increased buying volume, would strengthen this scenario.
2. Bearish Scenario:
If the 20,566 support zone is breached, the index could further decline toward the 20,250 level. Breaking this support would indicate significant market weakness and potential continuation of the downtrend.
Indicator Analysis
Bollinger Bands:
The price has reached the lower Bollinger Band, typically signaling a potential reversal. However, continued downward movement is possible if the lower band is decisively broken.
20-Period Moving Average (Blue Line):
This moving average acts as dynamic resistance. A breakout above this level may signal a short-term trend reversal.
Conclusion and Trading Suggestions
Considering the NASDAQ 100 index's position near the 20,566 support level, traders should watch for reversal signals. If confirmation of a rebound (e.g., increased trading volume or formation of reversal patterns) occurs, entering long positions near this area could be favorable. However, if this support is breached, it is advisable to avoid long trades and look for lower levels for market entry.
Recommendations:
Enter long positions near the 20,566 level with a stop-loss below 20,500.
Initial upside target: 21,381.
Manage risk by setting appropriate stop-loss levels and monitoring price behavior near critical zones.
