The monthly chart shows that NASDAQ is reaching the critical resistance zone of 15050-15500. This is a confluence of upside resistance and downside support after five consecutive months of the upside. A break above this level exposes the 17000 again and could indicate that we will have an upside reversal continuation but only if we get a confirmed break above 15500.
The Weekly NASDAQ chart reveals a possible second-wave pullback from a 10500 bottom. This is also a downside channel top resistance and a Fibonacci retracement of 78.6% from the 2021 top. A break below 13500 is required to confirm that we are in the second wave pullback and that the downside will continue. A break above 15500 will lead to a powerful reversal higher and will give us other signals for the long trade entry.
As the famous trader says…
” I believe in analysis and not forecasting.”
Nicolas Darvas
How to trade this?
Obviously, for Q3 2023, we have this upside resistance of 15500 which should be broken higher for an upside continuation. This means that now short trade entries have some advantage over long trade entries as this recent move higher seems not sustainable at this point. A break below 15000 would give us a high probability short trade It would be best if you opened a short trade here first. The risk to reward on this trade is higher than 1, and the trade could be on Monday NY session upon a break below 15000 to target 14000 with a stop loss above 15260.
