Nasdaq 100 Bearish Divergence Signals Potential 30% down ?Chart Analysis (Monthly):
The Nasdaq 100 (NDX) is showing a significant bearish divergence on the monthly chart with RSI, which historically has been a strong reversal signal. While the price has recently made a new high, the RSI has failed to confirm this move, forming lower highs. This divergence typically precedes major corrections in the index. Similar patters have been observed on S&P 500 and FANG+ Index.
Historical Context:
In past instances (highlighted on the chart), similar divergences led to substantial declines:
2018: ~23% drop
2022: ~37% drop
Currently, if history repeats, the NDX could potentially correct by ~30% from recent highs, bringing it closer to the 16,000–17,000 zone, aligning with the previous demand zone and the 100-month moving average.
Fundamental Backdrop – Tariff Issues:
Adding to the technical weakness, renewed concerns over U.S. trade tariffs under Trump's policy stance are resurfacing. Potential escalation in tariffs could weigh heavily on mega-cap tech stocks, which dominate NDX, impacting global supply chains and margins. Historically, tariff-related uncertainty has triggered volatility in growth-heavy sectors.
Watchlist Action:
Closely monitor upcoming U.S. trade policy announcements and tariff discussions.
Hedge long positions or consider selective short opportunities if bearish confirmation patterns appear on weekly/daily timeframes.
📌 Disclaimer: This analysis is for educational purposes only and does not constitute financial advice.
