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Market Outlook

Chart of the week – US NDAQ 100 bullish breakout but risk of minor pull-back first

Chart of the week – US NDAQ 100 

US NDAQ 100 bullish breakout but risk of minor pull-back first

Short-term technical analysis

Click link to enlarge chart

Source: CMC Markets

Time stamped: 3 Apr 2021 at 12:00 pm SGT

  • The US NDAQ 100 (Nasdaq 100) Index has shaped a bullish breakout from its medium-term “Inverse Head & Shoulders” bullish reversal configuration on last Friday, 1 April during the start of the European session and rallied by + 1.10% to close at 13,358.
  • A bullish breakout from its 5-week “Inverse Head & Shoulders” configuration in place since 25 March 2021 indicates a potential start of a new bullish impulsive up move sequence after a prior corrective decline of -12% from its current all-time high of 13906 printed on 16 February 2021 to the recent 6 March 2021 swing low area of 12180.
  • The 4-hour RSI is now coming close to an extreme overbought level of 80, hence the Index may see a minor pull-back first in the first half of next week to retrace its strong upside momentum of price action seen last week to retest around the 13170 intermediate support (former neckline resistance of the Inverse Head & Shoulders).
  • As long as the 12750/620 short-term pivotal support holds, the Index is likely to stage another potential up move (after a minor pull-back) to target the next resistance at 13710 in the first step (upper boundary of the minor ascending channel from 6 Mar 2021 low & 1.00 Fibonacci expansion) and a break above 13710 opens up scope for 13965/14030 next.
  • On the other hand, an hourly close below 12620 invalidates the bullish scenario to see another round of choppy decline to retest the 5-week range configuration support at 12180.