Nasdaq 100 traded in a consolidative manner this week, staying between the support of 7180 and its all-time high of around 7335. The index continues to trade within the channel that has been containing the price action since the beginning of April and thus, we would consider the medium-term outlook to be positive.
That said, we would like to see a clear close above 7335 before we get confident on the continuation of the prevailing uptrend. Such a break would confirm a forthcoming higher high on the daily chart and would drive the index to levels never seen before.
Looking at our daily momentum studies, we see that the RSI lies above 50 and is pointing up, while the MACD stands above both its zero and trigger lines. It points north as well. These indicators detect positive speed and support the case for Nasdaq to drift higher in the foreseeable future.
On the downside, a dip back below 7180 is possible to aim for the 7105 support, or the lower end of the aforementioned channel. However, even if this is the case, we would still see a positive picture as the bulls may take advantage of the price’s proximity to the lower bound and shoot again. We would like to see a clear close below that bound and the 7105 barrier before we abandon the bullish case, at least in the near term.
Such break may open the way for the 6980 zone, the break of which may signal the completion of a double top formation and perhaps bring a near-term trend reversal. If this is the case, we would expect the bears to set the stage for our next support zone of 6855.
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