False Breakout Raises Red Flags for NASDAQ’s Uptrend

False Breakout Raises Red Flags for NASDAQ’s Uptrend
In today's technical analysis, let's turn our focus to the NASDAQ, where recent movements hint at the possibility of a more significant correction. The index is showing some worrying signs, especially after a false breakout above a crucial orange resistance. This false breakout, highlighted in red, aligns with a bounce from the top of a long-standing channel-up formation, indicated by the upper green line. The failure to hold above these levels has brought the NASDAQ down to a crucial testing ground.

Currently, NASDAQ is perched on two critical supports: the lower line of the channel-up formation and a mid-term uptrend line marked in blue. As long as the index stays above these levels, traders have reason for optimism, with this zone presenting a potentially favorable place for buyers to step in. A sustained bounce here could suggest that the NASDAQ will hold its ground, maintaining its broader positive trajectory for now.

However, should the NASDAQ close a day below both support levels, it could signal a more pronounced shift. A break below these supports would offer a clear short-term signal to sell and could indicate the beginning of a broader bearish correction in the mid-term. The action around these two key levels will likely set the tone for the NASDAQ’s mid-term outlook, with a decisive move either reinforcing optimism or confirming a more substantial downturn ahead.


 
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