NASDAQ: still looking for a test of 4,800 by Mary McNamara

I have been writing about how I am looking for a test of 4,800 on the NASDAQ index since this key level was broken at the end of last month. I had started to lose hope that a test would evolve but recent price action suggests that a deeper pull back might be in store and, then, perhaps even some more!

 NASDAQ monthly: this broke above 4,800 resistance at the end of February and I’m looking for at least a test of this level before any possible bullish continuation from the ascending triangle breakout:

NASDAQmonthly

S&P500 monthly: this index tested its breakout level once before continuing on in bullish fashion from an ascending triangle breakout:

S&Pmonthly

DJIA monthly: ditto here:

INDUmonthly

Bio-techs: these have been on a tear since last year and this can be seen from the Biotech index ETF chart below. Biotech weakness contributed to much of the yesterday’s NASDAQ pull back and Fib levels on the index suggest there could be more of a pull back in store. The 61.8% fib is down near $160 which is also an S/R level and this may be targeted in any continued weakness. 

XBI weekly: Bio-tech ETF: I prefer my Fib position to the one chosen by the software on my charting platform!

XBImonthly

A Bio-tech pullback of this magnitude would most likely drag the NASDAQ even lower than my desired 4,800 level. I’ll be watching to see where the monthly NASDAQ candle closes next week but a close below 4,800 would be bearish and suggest  a deeper pullback for the index.

Summary: watch where the monthly NASDAQ candle closes next week:

  • A hold above 4,800 would suggest bullish continuation from the ascending triangle breakout.
  • A close below 4,800 would suggest a deeper correction before any bullish continuation. Look then to daily and monthly support trend lines.

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