Nasdaq 100 index Technical Forecast: Bullish
- The Nasdaq 100 index breached an immediate resistance level at 14,950 and opened the door for further gains with an eye on 15,300
- The MACD indicator trended lower however, forming a bearish divergence
- Hong Kong’s Hang Seng Index (HSI) settled in a trading range after a sharp decline
Nasdaq 100 – Daily Chart
Chart created with TradingView
The Nasdaq 100 index extended higher towards the weekend, aiming to challenge the next resistance level at 15,300 – the 127.2% Fibonacci extension. The index formed consecutive higher highs and higher lows since the end of May, marking a bullish trend. A trio of short-, medium- and longer-term Simple Moving Average (SMA) lines is sloping upwards, suggesting that the bullish trajectory remains intact.
The MACD indicator retreated from recent highs and trended lower however, forming a bearish divergence with prices. This suggests that upward momentum may be weakening. A pullback may bring prices to the 20-day SMA line for immediate support. The Nasdaq 100 registered an eye-watering gain of 16.8% since the “Double Bottom” pattern formed at the end of May, rendering it susceptible to a technical pullback when profit-taking kicks in.
Hang Seng Index (HSI) – Daily Chart
Chart created with TradingView
The Hang Seng Index (HSI) fell sharply and breached a “Descending Triangle” in late July amid Beijing’s regulatory crackdown on the technology and education sectors. The index entered a trading rangethereafter, with immediate support and resistance levels found at 25,750 and 26,650 respectively. The overall trend appears to be bearish-biased, although the index has found strong support at 24,850 – the 78.6% Fibonacci retracement. The MACD indicator is about to form a bullish crossover below the neutral midpoint, suggesting that selling pressure may be fading.
— Written by Margaret Yang, Strategist for DailyFX.com
To contact Margaret, use the Comments section below or @margaretyjy on Twitter
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