The Nasdaq (NQ100) has shown a remarkable recovery (green arrow) after a deep bearish retracement (red candles). The angle of the price action indicates strong momentum – although price is reaching a key resistance at the 78.6% Fibonacci level.
Daily chart
Uptrend continue but after a bearish retracement
As mentioned in last week’s analysis with FXStreet, a new higher high on the NQ100 is the most probable outcome in the near future. But there are some key hurdles ahead.
The resistance at the ET zone 7 and 78.6% Fibonacci confluence is certainly one of them (yellow box). Also the 88.6% Fibonacci level (orange box) and double top will likely gain respect (red box).
This is currently our expected roadmap and path of least resistance for the NQ100:
1) Orange arrow: a shallow pullback is expected on lower time frames due to the 78.6% Fib.
2) Blue arrows: an uptrend continuation is expected to push price towards the 88.6% Fib and/or double top.
3) Red arrow: eventually a larger bearish retracement is expected once the uptrend shows some signs of exhaustion on lower timeframes.
Four-hour chart
Momentum riding higher
Price action showed bullish diamonds which confirms the strong impulsive nature of the price swing (green diamonds). The support fractals have also respected the 21 ema support and ET zone 6.
Our roadmap radar explained – here is what price action is expected to do in our view:
1) Reach ET zone 8 (green arrow).
2) Complete multiple wave 4-5 patterns (one is shown in pink).
3) First retrace to the 23.6% Fibonacci level and 21 ema zone on the 1 hour chart for an ABC (purple) correction in wave 4 (grey) – see chart below.
4) Then move higher in a wave 5 (grey) of wave 3 (pink).
One-hour chart
