The Nasdaq index is experiencing increased pressure after it was unable to establish a new resistance level following its breakout from the previous bearish channel. The recent uptick proved to be unsustainable, indicating that buyers are beginning to lose their grip on momentum. This reality has become more evident as prices continue to rise; however, the technical structure does not support a robust continuation of the bullish trend. The failure to maintain the breakout serves as an early signal that the market is responding with stronger selling pressure.
On another note, the appearance of bearish divergence on the 1-hour timeframe further augments the potential for a short-term correction. While prices keep climbing, the Stochastic indicator is showing a downtrend, indicating a disconnect between price action and momentum strength. The combination of weak buyers and the divergence signals suggests that Nasdaq is at risk for further declines, with a possibility of testing the nearest support area.
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The bearish channel evident on the 15-minute timeframe indicates that downward pressure on the Nasdaq remains strong, reinforcing the potential for continued weakening. The direction of the Moving Average (MA) pointing downwards, coupled with the MACD in negative territory, provides additional confirmation that the momentum of sellers is still robust. Given these technical indicators, Nasdaq may continue its downward trend and potentially test the nearest support level around 25,152.
Technical Reference: sell when below 25,055.
Potential Stop Loss 1: 25,345
Potential Stop Loss 2: 25.375
Potential Take Profit 1: 25,187
Potential Take Profit 2: 25,152
