NASDAQ might have carved a meaningful top around 11291, or could be very close to carving soon. A continued drop below 10400 levels from here would confirm that the indice has formed a meaningful top around 11291 levels, going forward.
NASDAQ probable wave counts since 6609 are as follows: The indice has rallied from 6609 levels through 11291, sub dividing into 5 waves as labelled from 1 through 5 on the chart here. Unlike its peers Dow Jones and SPX500, NASDAQ has print fresh highs.
This phenomenon could be referred to as a bearish divergence, and might be indicating a potential trend reversal. A more objective approach would be as follows. Immediate support is seen through 10316 levels. We must allow prices to break below that mark to confirm a bearish reversal.
As discussed above, if the impulse wave is in place already, the indice should ideally produce a corrective wave lower towards 9495 at least. Having said that, please note that if NASDAQ has to change the trend, it would not produce a corrective drop.
In case of a bearish reversal, the indice would continue dropping lower towards 6609 levels, which is Wave 4 of one lesser degree. Either way, the indice should be preparing to drop lower from here or from 11350 levels respectively.
Traders might take short potions around current price at 11200, with protective stops above 11500 levels and projected target towards 9495 levels respectively. A break below 10400 would be encouraging to bears.
Technical Analysis Team
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