The carnage on the market continues. Yesterday, stocks recorded a terrible day and most managed to secure the new mid-term lows. In today’s analysis, we’ll focus on the NASDAQ.
If you’re buying stocks on the NASDAQ itself, probably you’re not enjoying the latest route, but if you’re a technical trader and you’re going with a bearish trend, you must be delighted.
What’s great about the price action of the NASDAQ is how it respects the Fibonacci levels. So, the top of the trend was in November, and since then, we’ve had a bearish correction, or a new bearish trend, if you will.
Since February, the price has started to respect Fibonacci retracements with great accuracy, which is only growing with time. Since April, the price has only been respecting Fibo: 38.2% (green) and 50% (blue). Most recently, the NASDAQ managed to break 50% and drop lower. The natural target for this movement is the 61.8% Fibonacci. Chances that we’ll get there are pretty high.
It’s worth mentioning that all of this is happening inside of the wedge pattern (red lines), and the breakout of the upper line can be the first stage of a major buy signal. If the current sentiment stays negative, the NASDAQ will test the 61.8% Fibo soon.
