Breaking Boundaries or Bouncing Back? NASDAQ's Crucial Test
31 October 2023
In today's in-depth analysis, we pivot our focus back to NASDAQ, as recent market movements suggest a potential reversal on indices, a change that first caught the market's attention on Thursday. This shift is particularly pronounced on various instruments, where key resistances have been tested and challenged. For NASDAQ, the story unfolds around its engagement with the lower boundary of the wedge pattern—a pattern that has cast its shadow for months and ultimately culminated in a downward breakout.
This development was undeniably a sign of market fragility. However, as the trading sessions roll on, NASDAQ seems intent on revisiting this broken line, putting its strength to the test as a newfound resistance. But the challenges don't end there. A looming horizontal zone around the 14,400-point mark, highlighted in a vibrant shade of orange, offers another formidable resistance for the index.
The current confluence of these two resistance levels is crucial. Should the price recoil from these points and embark on a downward journey, traders might interpret it as a golden opportunity to adopt a short stance. Conversely, should NASDAQ muster the strength to breach and establish itself above these resistances, it could be read as a robust buy signal. This scenario suggests the previous downward breakout might have been deceptive and could pave the way for a vigorous rebound.