NASDAQ ended Friday with a positive note, as the price created a nice-looking bullish body, and the new week started even higher. Does that mean we ended the painful correction and are back in an uptrend? Many traders count on that, but technical analysis is not so optimistic about it.
The recent selloff stopped on the psychological barrier of 14000 (red). But, the bounce itself is not encouraging from the price action point of view. In the shorter term, we have a sideways trend, locked between the 14000 from the bottom and 14600 (green) from the top.
Usually, we have a consolidation like this after a significant drop. It means that it’s not the end, and the selloff should continue. This can be the case here, too, as you know that NASDAQ tended to bounce using V-shaped reversals for the past several months, not consolidations like this.
Consolidation above such important support points to sellers getting ready for a decisive breakout than buyers for a bounce. Luckily, there is quite an easy way to find out.
Price breaking the green resistance and aiming higher will confirm the bullish reversal. On the other hand, the price staying between the 14k and 14.6k will increase the chances for a further slide and another bearish wave on tech-heavy NASDAQ.
