The movement of the Nasdaq on the 1-hour timeframe indicates a shift in trend direction after prices have broken below the lower line of the bullish channel established since late May. The current price structure is forming a lower high (LH) and lower low (L), revealing that selling pressure is beginning to take the lead. The confirmation of the breaklow from the support channel strengthens the trend reversal signal, particularly as prices fail to return to the channel and instead create a pullback around the trend line which has transitioned to act as resistance.
Additionally, the CCI indicator suggests an overbought condition, which is often an early sign of a potential directional reversal in the short term. If selling pressure continues and prices remain below the sloping resistance line (red trendline), the likelihood of a further decline remains open, targeting a gradual drop towards the previous support level around 21492. This pattern indicates that market participants are starting to take profit and are preparing for a deeper corrective phase.
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Currently, the Nasdaq continues to operate within a bearish channel on the 15-minute timeframe, suggesting dominant selling pressure in the short term. Presently, prices are nearing the upper boundary of the bearish channel, reinforcing the potential for a directional reversal. The Stochastic indicator’s position in the overbought area further confirms the risk of Nasdaq undergoing a corrective drop to test the support at 21,598.
Technical References: sell while below 21,950
Potential Stop Loss 1: 21,889
Potential Stop Loss 2: 21,950
Potential Take Profit 1: 21,650
Potential Take Profit 2: 21,598
