Will NASDAQ's Bearish Tumble Meet a Bullish Bounce?
27 October 2023
The focus on global stock indices has heightened recently, and for good reason. The trading landscape has been turbulent, to say the least. Particularly, the gloomy atmosphere cast over the markets on Wednesday and Thursday, characterized by significant drops, commands attention.
A few days ago, on the 23rd of October, we presented a detailed analysis of NASDAQ. Given the recent turn of events, an update seems not only apt but necessary. When we last discussed the NASDAQ's trajectory on Monday, the index was comfortably positioned above its critical supports. One was the lower boundary of the wedge pattern, illustrated by a lower black line, and the other a significant horizontal barrier set at 14,450 points, which was distinctly marked in orange.
However, as trading unfolded on Wednesday and Thursday, a dramatic shift occurred. Both the aforementioned supports crumbled under the market's weight, paving the way for a strong sell signal. With these support lines breached, selling sentiments have undoubtedly intensified.
As we navigate this bearish terrain, the immediate target that appears on the horizon is the 38.2 Fibonacci level. Given the current momentum and market sentiment, the odds of the index reaching this level seem considerably high.
However, in the unpredictable world of stock trading, hope and opportunity can arise from even the most unexpected quarters. There exists a silver lining or a positive scenario, if you will. If NASDAQ manages to claw its way back above the orange-marked zone, it could imply a false breakout. Such a move would be a beacon for buyers, serving as a distinct buy signal. But at this moment, pinning hopes on this bullish turnaround seems optimistic, with the likelihood appearing relatively slim.
In conclusion, while NASDAQ's recent performance may be causing consternation among traders and investors alike, it's essential to remain objective and vigilant. Markets ebb and flow, and understanding these tides can make all the difference in one's trading journey.