NASDAQ suffered most among major US indices on Trump’s intention to curb foreign investments in US tech industry. This week’s downside acceleration is starting to argue that it’s in a medium term correction. For the near term, outlook will stay bearish as long as 7610.67 resistance holds. Focus is on 55 day EMA (now at 7460.17). Sustained trading below this EMA will add more weight to this bearish case.
Looking at the bigger picture, outlook isn’t too good neither with bearish divergence condition seen in weekly MACD and RSI. Long term trend line support at around 7125 is another line of defence. Firm break there would confirm that fall from 7806.60 is correcting whole up trend from 4209.76. In that case, we’ll likely see more downside to 38.2% retracement of 4209.76 to 7806.60 at 6432.60) before forming a bottom.
