The Nasdaq looks extremely bullish as traders continue to scoop up price dips during times of market volatility, which are certainly becoming more frequent in recent weeks.
It appears that the Nasdaq could be headed considerably higher based on recent price action, and the charts are showing a path towards the 14,000 level is entirely possible.
The fundamental landscape also looks more positive at this stage due the Fed becoming more data driven and less likely to impose aggressive 75 basis point rate hikes.
Should we see this week’s job report coming in week we could also, and quite strangely, see the Nasdaq heading higher as bad news is now starting to become good news for stocks.
Tech stocks are generally high momentum plays, and this has been very evident with the Nasdaq recently. Massive amounts of buying power have been present since the 11,000-price floor.
Traders sentiment towards the Nasdaq is now bearish. This is very encouraging for the current recovery, as the retail crowd is typically on the wrong side of the trade when new trends emerge. However, the bias is not too wide.
I think we could see the Nasdaq bullish bias towards the leading US Tech index increasing over the coming days and weeks it could really help to speed up the rally.
The Nasdaq index on the four-hour time frame and looks like it is making a perfect technical test back towards the 13,200-area due to a pattern that has played.
A massive, inverted head and shoulders pattern has recently been activated and the target is 13,200. It is even possible the Nasdaq could overextend to the upside to 13,500.
The Nasdaq index is currently enjoying significant momentum after breaking above a falling wedge. A move above the 14,100 level is needed to change the price trend.
The possibility for movement to the upside is still high probability. Bulls may need to break above 13,500 near-term resistance for any further gains to the upside.