The Nasdaq index currently stands at a precarious position as the Stochastic indicator signals an overbought condition, suggesting that the upward momentum may be losing steam. Coupled with prices touching the upper boundary of the Bollinger Bands, which often indicates a reversal point following significant movements, these signals warn that the market could face a correction. When technical indicators display overbought conditions, there is a risk that traders will begin to take profits, potentially triggering selling pressure in the short term.
Should this selling pressure persist, the Nasdaq risks testing lower support levels, opening the door to more pronounced declines. A breach below these support levels could hasten the price correction. Market participants should closely monitor for further confirmations from other technical indicators and economic news that could impact the index’s movements, as these could have significant implications.
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On the 15-minute time frame, Nasdaq’s movement exhibits signs that the uptrend has peaked, with the Moving Average (MA) beginning to flatten, indicating a loss of bullish momentum. Additionally, with the Commodity Channel Index (CCI) descending from the overbought area, the likelihood of a directional reversal grows stronger. This situation suggests that the market may have reached saturation and is poised for a correction towards the next support level of 18,767.
Technical Guidance: sell below 19,427
Potential Stop Loss 1: 19,299
Potential Stop Loss 2: 19,427
Potential Take Profit 1: 18,902
Potential Take Profit 2: 18,767
