NASDAQ Might Have Carved A Top Around 11071
24 July 2020
NASDAQ seems to have completed its recent rally that had begun since March 23, 2020 from 6629 levels. The tech indice seems to have carved a meaningful top around 11071 levels by completing a potential double top there.
NASDAQ probable wave structure is as follows: The sub waves are not labelled here but an impulse wave seems to be complete between 6629 and 11071 levels respectively. This could potentially last rally at a higher degree and hence could attract a major bearish reversal ahead.
Also note that the indice is breaking below trend line support drawn from 6629 levels, the March 23 lows. A break into the sell zone also indicates a potential bearish reversal might just be underway. A break below 10372 support add to confidence.
NASDAQ probable lower degree wave counts are as follows: The drop from 11071 through 10372 was an impulse wave labelled as Wave 1 here. An impulse is normally followed by a corrective wave in the opposite direction.
The subsequent rally towards 11071 was corrective and did not exceed the head of Wave 1. Hence we have labelled as Wave 2. If the above lower degree wave counts hold well, NASDAQ might be on its way towards 9400 levels as Wave 3 unfolds.
Most traders might have sold around 11071 or would be preparing to initiate fresh short positions around current price action (10500). The protective stop could be placed above 11071 and projected targets below 9400 in the short term.
Prepared by
Technical Analysis Team
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