The Nasdaq continues to exhibit signs of weakness following the establishment of a bearish channel on the hourly chart. The persistent downward price structure, combined with a declining Moving Average (MA) position, serves as an early indication that selling pressure is beginning to prevail in the market. The ZigZag indicator also reinforces this signal with a consistent downtrend pattern, indicating a phase of correction following a prior strengthening period. This condition reflects a cautious approach from market participants as they anticipate the opening of the European session this afternoon, leaning towards waiting for confirmation on the next movement direction.
From a momentum perspective, the CCI indicator residing in the overbought area reveals that upward momentum is starting to wane, which may pave the way for further corrections in the near term. Should selling pressure persist, the Nasdaq is likely to test the nearest support level, critical for determining the next direction. A failure to maintain price above this level could intensify the decline, whereas successfully holding the primary support level might trigger a short-term technical rebound before a new trend sets in.
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Moreover, the Nasdaq is also displaying potential for additional correction after the price faced rejection from the bullish resistance channel, coinciding with the upper boundary of the Bollinger Bands (BB). Rejection at this level suggests a return of selling pressure after a brief strengthening phase. The Stochastic indicator, also positioned in the overbought territory, further substantiates the signal for potential short-term weakness. With these technical signals in combination, the Nasdaq has the opportunity to continue its downward movement to test the support area around the 25,553 level during the European session this afternoon.
Technical Reference: sell below 25,778
Potential Stop Loss 1: 25,778
Potential Stop Loss 2: 25,817
Potential Take Profit 1: 25,586
Potential Take Profit 2: 25,553
