NASDAQ seems to have carved a meaningful top just below 12500 mark and could be setting up for a significant reversal towards 6600 levels, the March 2020 lows at least. Bears remain inclined to remain in control from here and intraday rallies should be well capped below 12466 mark.
NASDAQ probable wave counts are as follows. The drop towards 6600/20 lows in March 2020 could be seen as a larger degree Wave ((4)) termination (not labelled on the chart view here). The subsequent rally through 12466 highs has clearly unfolded into 5 waves.
If the above proposed count holds well, NASDAQ might have terminated a larger degree Wave ((5)) towards 12466 levels on September 02, 2020. Since then, the indice has collapsed over 11% and managed to print lows at 10936, barely taking out significant support at 10854 mark.
Also note that NASDAQ has now broken below its immediate trend line support since March 2020 lows. The indice is trading in the sell zone for now and the back side of previous support trend line will act as resistance around 11700/800 zone, to cap any counter trend rallies.
Looking into the lower degree wave counts, the drop since 12466 through 10936 might have completed a lower degree impulse Wave 1 or could be close to completing around 10854 mark. If the above holds true, we should witness a counter trend rally towards 11700/800 levels, going further.
Traders might be inclined to initiate fresh short positions around 11700/800 potential resistance zone, with protective stops above 12500 and projected targets below 6600 respectively, over the next several weeks.
Technical Analysis Team
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