The Nasdaq index appears poised for a further decline as prices retreat from the upper boundary of the Bollinger Bands, indicating an increase in selling pressure. This downturn suggests that the Nasdaq may be in an overbought condition, with prices likely to correct following an excessive rally. Additionally, the return of prices within the Bollinger Bands signifies a decrease in bullish momentum, creating the potential for further declines towards the nearest support level.
The bearish signal is further reinforced by the Stochastic Oscillator, which has sharply dropped from the overbought region, reflecting the potential for increased selling pressure. Such a steep decline in the Stochastic is often an early indicator that a weakening momentum is developing.
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The Nasdaq appears ready to continue its downward trajectory after creating a double top pattern on the 15-minute time frame, recognized as a bearish reversal pattern. This formation occurs when the price fails to breach the same resistance level on two occasions, signifying a rise in selling pressure. Confirmation of this weakness would be solidified if prices break below the neckline of the double top formation, opening up the possibility of a decline toward the 19,435 support area.
Technical References: sell if below 19,765
Potential Stop Loss 1: 19,710
Potential Stop Loss 2: 19,765
Potential Take Profit 1: 19,485
Potential Take Profit 2: 19,435
