Currently approaching the bottom of the weekly clouds support area (around 13’400) ; the upcoming weekly closing below that level should not be underestimated as if it is the case this would be the first time since a very long time ago that it did not happen.
We already saw, in February and March three breakdown attempts, which all failed to be confirmed by a weekly closing below the clouds.
So what next ?
In this weekly picture, levels to look at,(on a weekly closing basis) are respectively :
14’105 on the upside
13’400 on the downside
A successful recovery above 14’195 would put again the Nasdaq in a neutral territory and a failure to do it would increase the selling pressure calling for lower level towards the former double bottom @ (13’025 – 12’942).
LONG TERM FIBONACCI RETRACEMENT (6’628.75 – 16’767.50)
38.20% @ 12’894.50
50.00% @ 11’698.25 (BEING ALSO THE KIJUN-SEN MONTHLY !)
61.8% @ 10’501.75
RSI below 50 @ 41.54
Currently attempting clouds breakout in progress (to be confirmed) on a daily closing basis
The 61.8% Fibonacci retracement of the last corrective rally starting from 12’942.50 towards 15’268.75 has already been filled @ 13’831.25.
Next support is @ 13’440 ahead of the former double bottom previously mentioned (13’025 – 12’942)
On the upside in this daily time frame and in order to stabilize and neutralise, temporary the ongoing price action, the Nasdaq should close, at least, on a daily basis above 14’105 which should not mean that the Nasdaq will be out of danger !
Globally both weekly and daily pictures look heavy and the 13’000-12’942 support area will be CRUCIAL for further development, with the following implications :
POSITIVE SIGNAL will be given if the NASDAQ HOLD ABOVE THIS AREA (Potential double bottom ) opening the door for a recovery
NEGATIVE SIGNAL will be given in the case of FAILURE TO HOLD THIS SUPPORT AREA , opening the door for lower levels towards the next important support @ 11’698.25, being both the 50% Fibonacci retracement of the big rally and the weekly Kijun-Sen.
Watch and monitor closely intraday time frames which will help to detect intermediate signal (s), such as RSIbullish divergences, which will validate or invalidate the scenarios explained in longer time frames.
Ironman8848. – Jean-Pierre Burki
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