The Nasdaq has recently displayed signs of weakening after it broke below the bullish support channel, followed by a pullback that failed to reclaim the previous bullish structure that underpinned its movement. This situation serves as an early indication that the upward trend is fading, with buyers losing their grip, thereby opening the door for a potential directional shift. The breach of the support level also suggests that the market is starting to react to a more dominant selling pressure, causing the technical structure to shift away from the previously stable bullish pattern.
Technical signals further reinforce the bearish bias, as the moving averages indicate a downward trajectory and the MACD is positioned in negative territory, highlighting an increasing momentum for sellers. This combination of indicators suggests that the Nasdaq may be in a correction phase that could persist, especially if selling pressure does not subside. Under these conditions, there is a likelihood that the Nasdaq will retest the nearest low on the 1-hour chart, which is a critical area to determine whether the bearish trend will deepen or if this will merely constitute a brief correction before a potential recovery.
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The breakdown of the bullish channel signals a weakening of the Nasdaq’s upward structure, while the descending moving averages and the CCI indicating an overbought condition apply further pressure on the potential for price weakness. This combination of technical signals illustrates that buyers are beginning to lose momentum, allowing sellers to regain control of intraday price action. Given this scenario, the Nasdaq has the potential to continue its decline to test the support level of 25,775, as long as prices fail to break back above the bullish channel that has been breached earlier.
Technical Reference: sell as long as it remains below 25,775
Potential Stop Loss 1: 25,725
Potential Stop Loss 2: 25,775
Potential Take Profit 1: 25,535
Potential Take Profit 2: 25,490
