Nasdaq Technical Analysis – Opposing Patterns

The Nasdaq has taken a sharp dive lower due to a major sell-off in risk-on trades, especially in tech-related stocks, following its most recent price rally towards the 13,800-resistance level.

Something is very apparent in the Nasdaq right now in that we are seeing two opposing price pattern doing battle against each other. The battle of the patterns will define the journey ahead for leading tech index.

Technical analysis is very clear right now in what it is saying if we look at these two price patterns. Either a new high towards 14,500 is coming, over a decline towards 12,000 is on the cards.

In order for us to determine the direction we probably need to pay close attention to the 12,900 level. This is the weekly pivot point, and actually the neckline of a large reversal pattern.

Weakness under 12,900 will be a bad sign this week, however, if bulls can defend this level, then the bulls stand a good chance at rallying the price back towards 13,400 region.

Traders sentiment towards the Nasdaq is only slightly bullish. This is encouraging for the current recovery, as the retail crowd is not yet overheated on the bullish side, and largely absent from the rally.

I think we could see the Nasdaq bearish bias starting to continue towards the leading US Tech index over the coming days and weeks as traders disbelieve the current rally. This would accelerate the upside.