The carnage on the market continues. Yesterday, stocks recorded quite a terrible day and most of them managed to secure the new, mid-term lows. In today’s analysis we’ll focus on the Nasdaq, which in its drop, is very technical.
If you’re buying stocks on the Nasdaq itself, probably you’re not enjoying the latest route, but if you’re a technical trader and you’re going with a bearish trend than you must be delighted.
What’s great about the price action of the Nasdaq is how it respects the Fibonacci levels. So, the top of the trend was in November and since then we’ve had a bearish correction, or a new bearish trend if you will.
Since February, the price has started to respect Fibonacci retracements with great accuracy, which is only growing with time. Since April, the price has been pretty much only respecting Fibo: 38,2% (green) and 50% (blue). Most recently, the Nasdaq managed to break 50% and drop lower. The natural target for this movement is the 61,8% Fibonacci. Chances that we’ll get there are quite high.
It’s worth mentioning that all of this is happening inside of the wedge pattern (red lines) and the breakout of the upper line can be a first stage to a major buy signal. Current sentiment stays negative and most probably, the Nasdaq will test the 61,8% Fibo soon.