Nasdaq could test the broken neck line level
Last week, the Nasdaq broke below the neckline of a head and shoulders (H&S) pattern, which took over a month to form. The price quickly accelerated to the downside, dropping almost 800 points.
However, once the price approached the rising trend line of the channel (a channel that has kept the price elevated for the past nine months), buyers entered the market, and now the Nasdaq 100 is trading back above 19,000.
This recovery could continue in the coming days, and a test of the broken support level is likely.
Looking further ahead to the medium term, if the price reverses from that level and drops below 19,000 once more, a break below the support line of the channel becomes probable, potentially leading to a deep correction.
For now though, as long as 18,700 remains intact, the bulls hold the upper hand.
However, once the price approached the rising trend line of the channel (a channel that has kept the price elevated for the past nine months), buyers entered the market, and now the Nasdaq 100 is trading back above 19,000.
This recovery could continue in the coming days, and a test of the broken support level is likely.
Looking further ahead to the medium term, if the price reverses from that level and drops below 19,000 once more, a break below the support line of the channel becomes probable, potentially leading to a deep correction.
For now though, as long as 18,700 remains intact, the bulls hold the upper hand.
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