The Nasdaq is displaying signs of a trend reversal after successfully breaking out of a bearish channel that has been limiting price movement for some time. This breakout serves as an early indication that selling pressure is beginning to wane, creating opportunities for further rallies. Furthermore, the price has also surpassed the neckline of a reversal pattern, which further reinforces the suggestion that an uptrend is in the making. With the Bollinger Bands beginning to trend upwards, the bullish momentum may continue to build in the near future.
This breakout is backed by an increase in trading volume, signaling a stronger participation from buyers. If the Nasdaq can hold above the breakout level and confirm a new support, the potential for an increase towards the next resistance level becomes considerably higher. In this scenario, investors and traders need to monitor the newly formed support area as well as the movement of other indicators to confirm the sustainability of the bullish trend.
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The Commodity Channel Index (CCI) indicator is signaling positively, having risen from the oversold area on the 15-minute chart, suggesting that the possibilities for a trend reversal for the Nasdaq are increasing. When the CCI exits the oversold zone, it often indicates that selling pressure has diminished and buying is starting to take over the market. This condition suggests that the Nasdaq may strengthen in the short term, testing the resistance level at 20,583.
Technical references: buy while above 20,206
Potential Take Profit 1: 20,524
Potential Take Profit 2: 20,583
Potential Stop Loss 1: 20,270
Potential Stop Loss 2: 20,206
