The NASDAQ cash index traded higher yesterday, after hitting support near the 16305 barrier, and returned above the 16430 zone, which acted as the upper end of the sideways range that was containing most of the price action from Oct. 25 until today. With that in mind, we will consider the short-term picture to be positive.
Currently, the index is testing the 16570 barrier, marked by the high of Dec. 30, the break of which could target the peak of Dec. 28, at 16660. If they don’t stop there, we could see them touching the all-time high of the index, at around 16770, hit on Nov. 22.
Another break, above 16770, will take them into uncharted territory, with the following territory to consider as a resistance perhaps being the round figure of 17000.
Our short-term oscillators detect upside speed and add to the chances of further advances in this index. The RSI rebounds from near its 50 line and looks to be headed towards 70, while the MACD, already positive, has also turned up and has just crossed above its trigger line.
We will abandon the bullish case if we see a retreat back below the 16305 barrier. This may confirm the index’s return within the aforementioned sideways range and allow some more declines within that range.
The first level to consider as a support after the dip may be the high of Dec. 22, at 16200, the break of which could extend the fall towards the 15990 zone, marked by the inside swing high of Dec. 21.
If the slide doesn’t stop there either, we could see a test near the low of the day after, at around 15885.
