Today is Federal Reserve (Fed) day and not much else matters for the traders. Of course, they will monitor the news from Ukraine closely as well, but overall, all eyes are on today’s rate hike and the statement and press conference that will follow. Ahead of that, we can see huge optimism. Stocks are climbing higher, safe havens are going down, and oil is also following suit.
In this analysis, I would like to focus on NASDAQ, which is in a fascinating situation on the chart and is one step from a major buy signal. NASDAQ reversed quite sharply, which is typical of the American indices. They've done a V-shaped reversal many times. This time, it all started with a false bearish breakout (blue), below the horizontal support at 13150 points.
False bearish breakouts are usually a great signal to buy, which is the case today. In the beginning, we said that we were one step away from a buy signal. A buy signal will be created once the price breaks the long-term down trendline (black), connecting crucial lower highs since the beginning of the year. Once the daily candle closes above, the buy signal will emerge.
Of course, we need to have a negative scenario at the back of our heads. It’s significantly less probable, but if the price closes the day below the orange line, it will cancel the positive sentiment and trigger a long-term sell signal.
