Nasdaq-100 and other equity indices recently took a beating, but the /NQ notched a +2.7% bounce from this week’s lows as of yesterday’s close. Tech has been a powerful play in recent months, as Nasdaq-100 futures have seen a relatively swift and steep climb of more than 14% since mid-May. However, momentum and trend indicators suggest a larger shift could be brewing. The MACD completed a bearish crossover on Friday, and the Parabolic SAR also did so one day later, while the RSI plunged below the overbought area after showing bearish divergence as price made new all-time highs during the first two weeks of July.
The recent downward price action tested the confluence of the 21-day Exponential Moving Average and the yearly Linear Regression line near 14,500, but managed to close above it on Friday. These areas will be key to watch going forward. If the index sees a sell-off, some potentially important technical areas to the downside include the 21-day EMA near 14,140 and the 50-day Simple Moving Average near 14,014.
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