Technical analysis update: Nasdaq 100 (27th January 2022)

Yesterday after the FOMC press conference Nasdaq 100 (and other major indexes) surrendered most of its earlier gains. We continue to maintain a bearish stance on the general stock market as we think NQ1! is headed lower. Our view is supported by bearish fundamental and technical factors. Additionally, the current high volatility pushes odds in favor of more downside for the markets. We currently watch the upward moving channel on the hourly time frame. This formation presents an interesting trade setup with two alternatives. First alternative would involve placing a short trade entry below the lower bound of the upward moving channel. Stop-loss would be placed above the lower bound in order to limit loss potential. Second alternative would involve taking a long trade entry above the upper bound of the upward moving channel and placing stop-loss below it.

Illustration 1.01

Illustration above shows the daily chart of NQ1!. It also shows steepening of fan lines.

Technical analysis - daily time frame
RSI remains in the oversold territory. MACD and Stochastic are bearish. DM+ and DM- are bearish too. ADX continues to grow which suggests that the bearish trend continues to strengthen. Overall, the daily time frame is bearish.

Technical analysis - weekly time frame
RSI, MACD and Stochastic are bearish. Same applies to DM+ and DM-. ADX increases which suggests that the bearish trend strengthens. Overall, the weekly time frame is bearish.

Support and resistance

Please feel free to express your own ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.

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NQ1! reached new low today which is bearish. We will pay close attention to the price action tomorrow as well. In accordance with the setup we presented earlier NQ1! trades within the bearish zone (below the lower bound of the channel).

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NQ1! dipped below the yesterday low value which further bolsters bearish case for NQ1!.

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NQ1! breaks above the high from 26th January 2022 as it returns into the upward moving channel.

On the daily time frame: RSI crossed above 30 points which is bullish and may signal end of selling pressure. Similarly, ADX seems to peak which often coincides with trend reversal. MACD flattens which increases bullish odds. Stochastic turned bullish.

Though, we are currently unsure where will market lead next. Because of that we decide not to set any new price taret for NQ1!. Instead we will take role of market observer.