- Prior 5-day decline has reached short-term oversold condition right at a 14,950 key minor support.
- Positive price action follow-through seen yesterday has increased the odds of a minor countertrend rebound scenario within a short to medium downtrend phase.
- Watch the key short-term pivotal support at 15,180.
Nasdaq 100 minor short-term trend as of 15 Aug 2023 (Source: TradingView, click to enlarge chart)
This is a follow-up analysis of our prior report, “Nasdaq 100 Technical: Short-term bearish tone may still linger on” published on 4 August 2023. Click here for a recap.
The price actions of the US Nas 100 Index (a proxy for the Nasdaq 100 futures) have shaped a decline that has continued to inch lower below its 20-day moving average and the downside movement has almost reached a significant minor support at 14,945 (printed an intraday low of 14,960 yesterday, 14 August).
The bearish break below its 20-day moving average on 2 August 2023 where prior price actions of the Index have managed to hold above it since 5 May 2023 has increased the odds of a short to medium-term corrective decline phase that is now evolving.
However, price actions do move in a vertical fashion and the current decline has reached a short-term oversold condition and traced out a bullish divergence as seen last Friday, 11 August on the hourly RSI oscillator.
Interestingly, yesterday’s price actions of the Index have a positive following through as it staged a minor bullish breakout above the upper boundary of a minor descending channel in place since the 1 August 2023 high. Therefore, a minor countertrend rebound may be in progress at this juncture within a short to medium-term downtrend phase.
Watch the 15,180 key short-term pivotal support to maintain the minor countertrend rebound scenario to see the next intermediate resistance zone coming in at 15,370/420 (also the 20-day moving average).
However, failure to hold at the 15,180 pivotal support invalidates the bullish scenario to expose the 10 July 2023 swing low of 14,950 again in the first step.
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Kelvin Wong