NASDAQ continues to defy resistance yet again and prints high around 11527 levels. The indice has pulled back a bit and is trading round 11510 levels as we prepare the update. A bearish turn might be closer that we think and a break below 11200 would confirm.
NASDAQ probable wave counts are as follows: The indice had dropped along with Dow Jones and SPX500, in February-March 2020 and print lows around 6609 levels. This was in line with other global indices as well. The subsequent rally thereafter has managed to clear past previous highs around 9756.
NASDAQ has managed to push prices through past swing highs and print fresh highs around 11527 levels today. The rally between 6609 and 11527 also seem to be an impulse, which could be the final leg higher before resuming lower again.
If the above counts are correct, NASDAQ might have terminated higher around 11527 mark, completing 5 waves at a larger degree. Also, it might be preparing to reserve lower and produce a corrective drop of the same degree.
Further note that each high in NASDAQ has not been matched by its peers Dow Jones and SPX500, which is a bearish divergence scenario. It could be just a matter of time before a huge bearish reversal gets underway. We need to see a break below 11200 support from here.
Traders might have already taken profits on the long positions initiated earlier and remain flat as NASDAQ retraces. Aggressive traders might be preparing to initiate short positions after a break below 11200 levels. Watch out for bearish reversal unfolding soon.
Technical Analysis Team
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