Is the Nasdaq preparing to correct?

Summary:  The Nasdaq 100 seems to be pausing around 7,000. Is a correction near?


The strong rebound we have seen in US stocks since their late-December lows, and particularly since Fed chair Powell's dovish January 4 speech, could be ripe for a correction. 

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.
Source: Saxo Bank
You can follow the development of the pattern, and possibly the breakout, in the Trade Signals section on SaxoTraderGO represented by the CFD on the Nasdaq 100 future

When and if a breakout is confirmed, a possible price target and stop will be calculated updating the below details and trade ticket.
Source: Saxo Bank
Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.