Nasdaq Update- Bounce
Over at Fly's Blog I posted a chart of the Nasdaq last weekend. In that analysis I remarked that the 38.2% Fib. retracement level would be a likely place to pause or bounce. There is a good amount of congestion at that level going all the way back to April of last year. The bounce did happen right at those levels. What should be watched for next?
The next level of resistance is very obviously 2400. That area should be closely watched. Should the Nasdaq easily surpass 2400, I would expect the next resistance to be around 2425, and then at the 20-day simple moving average, or roughly in the area of 2450.
The distance from the high of 2531.42 to the bottom of the current correction at 2340.40 represents a drop of about 7.6%. The huge volume on the drop makes me leary to believe that all the downside is finished, and I think the bears will probably not be satisfied until they see something on the order of 10% or more.
The next level of resistance is very obviously 2400. That area should be closely watched. Should the Nasdaq easily surpass 2400, I would expect the next resistance to be around 2425, and then at the 20-day simple moving average, or roughly in the area of 2450.
The distance from the high of 2531.42 to the bottom of the current correction at 2340.40 represents a drop of about 7.6%. The huge volume on the drop makes me leary to believe that all the downside is finished, and I think the bears will probably not be satisfied until they see something on the order of 10% or more.
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