NASDAQ at Risk: Failed Breakout Signals Potential Sharp Drop
08 January 2026
NASDAQ is currently in a potentially very dangerous technical position. On the chart, we can clearly identify a symmetric triangle pattern, marked by converging trendlines. This type of formation usually reflects market indecision and compression of volatility, with the expectation that a strong directional move will follow once a breakout occurs. Recently, buyers attempted to break the price to the upside from this triangle, but that move failed to gain traction.
What makes the situation particularly concerning is the fact that the price is now coming back inside the triangle. This behavior strongly suggests a false breakout to the upside. False breakouts are among the most dangerous signals in technical analysis because they often trigger moves in the opposite direction, trapping late buyers and giving sellers confidence to step in aggressively.
If sellers manage to keep the price inside the triangle for a short period of time, the false breakout scenario will be fully established. In that case, downside pressure is likely to increase, with the first natural target being the lower boundary of the triangle. A decisive break below that lower line would open the door for a much deeper correction, potentially turning this consolidation phase into the starting point of a major bearish move on NASDAQ.