Nasdaq 100 Index Technical Forecast: BEAR
- The Nasdaq 100 the index is likely to have formed a Coarse Gartley pattern – classic harmonic configuration
- The MACD indicator formed a descending intersection and passed through the neutral center below, indicating a downward pressure
Chart by TradingView
The Nasdaq 100 index has entered a consolidation mode since mid-April, falling to an all-time high of over 6%. The index declined Gartley pattern, as highlighted in the chart above, suggesting a more likely deeper rebound.
The Gartley pattern is a classic pattern of harmonic diagrams based on Fibonacci numbers and relationships. The coarse starts with a downward trend from point “X” to point “A” and the price reversal at point “A”. The XA leg is followed by a bearAB = CDpattern.
Using Fibonacci ratios, the recovery between point X and point B should be approximately 61.8%. The feedback between point “C” and point “A” should be close to 38.2% or 88.6%. Point ‘D’ is usually an extension of point 127B or 127.2% of point B. These Fibonacci levels do not have to be accurate, but the closer they are, the more reliable the pattern tends to be. The bullish version of the Gartley pattern is simply inversely proportional to the decline.
In this scenario, the D-point is the highest ever and can be used as a comparison to reverse the effect of a setting drop. The C-spot can be viewed as a reference as the pattern plays.
Immediate support can be found in 12,900 – 127.2% Fibonacci extension, breakage that can cause additional loss to 12,487 eyes – 100% Fibonacci extension. Prices passed 50- and 100-day SMA lines decisively, suggesting that the near-term trend has declined.
The MACD indicator is below the neutral midpoint, indicating a decline.
Is on a weekly basis, The coarse Gartley pattern can be an indicator of a change in trends when prices exceed the C-point. A negative MACD divergence is observed, indicating that the upward momentum is fading. The 200% Fibonacci extension (14,013) remains the main resistance in the medium term.
Nasdaq 100 Index – Weekly Chart
Chart by TradingView
– Wrote DailyFX.com strategist Margaret Yang
Use the Comments or section below to contact Margaret @margaretyjy Twitter