NASDAQ Defends 12900 Support Again
24 April 2023
The new week on indices started with a small, controlled drop. As of now, there's nothing to worry about, but our hero of the day - the Nasdaq - is approaching a key support level, and a breakout could potentially cause some damage.
Let's start from the beginning. The recent upswing started in the middle of March. At the end of March, the price managed to break the horizontal resistance at 12900 (yellow), which had served as a key resistance level in February. This was a bullish sign, and buyers did not disappoint, as they managed to keep the price above that support level.
Although there was no spectacular rise, keeping the price close to the long-term highs is good enough. On Monday, we saw another test of the 12900 support level (yellow), and in the middle of the American session, we can see that the support held and buyers used the lower prices to buy again. Currently, the Nasdaq is inside a flag formation (red), which promotes a further upswing. This will become a base scenario once the price breaks the upper line of the flag, which has significant chances of happening.
In summary, while there may be some short-term volatility, the overall outlook for the Nasdaq remains positive. With the support at 12900 holding once again, buyers have taken advantage of lower prices to drive the index back up. If the price breaks the upper line of the flag, we can expect a further upswing in the near future.