Short-term technical outlook on Nasdaq 100/US Tech 100 (Tues 12 Jun)

Key technical elements

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The US Tech 100 Index (proxy for the Nasdaq 100 futures) has rallied by 7% from its 03 Jun 2019 low of 6936 with 6 consecutive days of higher closes without any pull-back in price action.

Negative exhaustion elements have been sighted in the past 2 days where it has shaped a daily bearish “Shooting Star” candlestick pattern on 11 Jun coupled with a bearish divergence signal seen in the shorter-term hourly RSI oscillator that indicates the recent upside momentum of price action has started to abate.

The Index has also broken below a minor descending trendline that has held previous dips in price action since 03 Jun 2019 with the hourly RSI oscillator that still has room to manoeuvre to the downside before it reaches an extreme oversold level.

Key Levels (1 to 3 days)

  • Intermediate resistance: 7515
  • Pivot (key resistance): 7600
  • Supports: 7350 & 7250/7200
  • Next resistance: 7745 (Fibonacci expansion)

Conclusion

If the 7600 key short-term pivotal resistance is not surpassed, the Index is likely to shape a potential minor pull-back/corrective decline to target the near-term support at 7350 with a maximum limit set at the 7250/7200 key medium-term support zone (50%/61.8% Fibonacci retracement of the recent rally from 03 Jun 2019 low to 11 Jun 2019 high).

However, an hourly close above 7600 invalidates the pull-back scenario for a continuation of the impulsive upleg towards the next intermediate resistance at 7745.

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