Technical Update - Nasdaq 100 rejected at key resistance, was that the peak? S&P 500 looks toppish but trend is still intact - for now
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Nasdaq 100 was rejected yesterday at the 13,542 key resistance. Despite opening higher sellers quickly took control and sold the Index throughout the session forming a Bearish Engulfing top and reversal candle.
Traded volume was light however, but there is divergence on RSI indicating we have seen a peak and could see a correction in Nasdaq. If Nasdaq 100 closes below 12,945 it could fuel a sell-off down to around 12,300.
For bullish scenario mentioned in yesterday’s analysis to unfold a close above 13,542 is needed in Nasdaq 100. https://www.home.saxo/content/articles/equity/ta-ussp500nasdaq-11082022
S&P 500 shoot higher but also failed to keep momentum and didn’t challenge the key resistance at 4,300. And contrary to Nasdaq there is no divergence on RSI meaning the general picture for US Indices is a bit blurry. Trend is still up however and the trend is your friend. One should be cautious of course as there are indication of potential top and reversal, especially for Nasdaq. For confirmation of a trend reversal in S&P 500 a close below 4,079 is needed. First indication of that scenario to unfold would be a break of the short-term rising trendline.
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