Nasdaq Drops to 3-Week Lows

As measured by the Fibonacci retracement tool, the Nasdaq has erased nearly 50% of the rally from March lows to April highs. However, the critical resistance remains at the 200-day moving average, currently near 15,200 USD.

Regarding the Ukraine war, White House national security adviser Jake Sullivan said on Sunday that Ukrainian forces could push back Russian troops successfully so that they were forced to retreat and regroup.

Bears pushed the Nasdaq below the 50-day moving average (the purple line) at 14,330 USD, changing the short-term outlook to bearish. As long as the index trades below the 50-day average, the next target for decline seems to be at 13,900 USD.

If the index jumps above 14,330 USD, we might see a bullish reversal, targeting 14,630 USD in the initial reaction. 

However, sentiment might stay bearish in the near future as the Fed seems ready to deliver more rate hikes than previously expected, likely crushing the high-debt and high-growth sectors, tech included.