We are going to look at the weekly and daily time frames.
WEEKLY (W1) :
The weekly closing level (@15’788), for the first time from a long time, has been below the Tenkan-Sen which should be seen as a warning confirmation signal of a trend reversal; nevertheless, the NQ1 still above two important support levels which are firstly the Mid Bollinger Band (@ 15’567) and the Kijun-Sen (@ 15’363) and this upcoming closing level will be very important to watch.
Indeed, a failure to hold and a clear breakout of 15’363 would be very negative for the future, opening the door for lower levels with focus on 14’374 (former low of October 4th and also 23.6% Fibonacci retracement of the big rally starting in March 2020 @ 6’628.75 towards the ATH @ 16’767.50 reached last month.
On the upside and in order to neutralize the ongoing downside risk, the NQ1 should recover at least above 16’330 on a weekly closing price level as such kind of price action would trigger a bullish engulfing pattern, been seen as a first bullish signal calling for a retest of the ATH .
Below both the Mid Bollinger Band & Kijun-Sen and the Tenkan-Sen; the last daily closing level (@ 15’788) triggered another black candle and it coincides roughly with the top of the daily clouds support area and also with the ongoing uptrend support line (in green)
RSI below 50,@ 45.03
In that time frame, pressure remains to the downside and in order to neutralise this risk, the NQ1 should quickly recover above the cluster resistance area (16’150) and this on a daily closing basis;
as long as it stays below it the selling pressure will remain, calling for lower level towards the bottom clouds support area , currently around 15’408, which is slightly above the H&S neckline !!!
Last but not least, monitor closely intraday price action in watching at carefully price action on shorter time frames (H4 and H1) to get early signal (s) which will help you to validate or invalidate the implication of the scenarios above mentioned and therefore act accordingly.
Ironman8848 & Jean-Pierre Burki
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