Is the Nasdaq preparing to correct?
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Summary: The Nasdaq 100 seems to be pausing around 7,000. Is a correction near?
The Nasdaq 100 index seems to be taking a breather around the 7,000 level, and is testing the 200-day simple moving average. It has formed what looks like a rising wedge pattern and possibly a double top. A close below 6,836 will confirm the double top with a target around 6,600. That would also be a bearish breakout of the wedge.
The Relative Strength Index is bullish with no divergence, indicating we could see another push higher in an effort to test resistance at 7,107. A close above that area could fuel a rally, forcing bears to close short positions.
When and if a breakout is confirmed, a possible price target and stop will be calculated updating the below details and trade ticket.
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