The Nasdaq is displaying signs of weakness as prices have breached the lower boundary of a bullish channel and have established a new low on the 1-hour timeframe. This development suggests a potential reversal in trend from uptrend to downtrend, particularly since any pullback towards the breakdown area has not managed to regain bullish momentum. The weakening price structure indicates that buyers are starting to lose their grip, while sellers are gradually taking control of the market. This selling pressure reflects increasing caution among investors regarding the technology sector, which has previously been a primary driver of the Nasdaq’s rally.
From a technical analysis perspective, the Commodity Channel Index (CCI) currently located in the overbought zone reinforces the possibility of a downward reversal. This signal implies that the short-term corrective rally is likely nearing its end and that selling pressure could resume shortly. As long as prices are unable to reclaim the area above the breakdown and remain below the dynamic resistance, there is a likelihood that the Nasdaq will extend its decline to test the next support area, coinciding with an increase in bearish momentum in the short term.
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The Nasdaq shows potential for weakness after prices failed to hold at the resistance of the Bollinger Bands (BB) and began to drift lower. The selling pressure has intensified as the CCI drops from the overbought zone, signifying weakening upward momentum and increasing dominance of sellers. Given these technical conditions, the Nasdaq may continue its decline to test a critical support level around 24,835 in the near term.
Technical Reference: Sell below 25,176
Potential Take Profit 1: 25,116
Potential Take Profit 2: 25,176
Potential Stop Loss 1: 24,900
Potential Stop Loss 2: 24,836
