Nasdaq: Bulls aiming at 28,800 after bearish pullback completed

The Nasdaq (NQ100) is testing the all-time high again, which is a critical decision zone. A bullish breakout could see a fresh round of buying. But a bearish reversal indicates the potential of a pullback.

Daily chart

How long can the bullish momentum last?

The bulls have plenty of space until the next key resistance at the ET zone 8. But an immediate continuation is not a given.

Yesterday’s bearish candle is telling a story that the bulls are facing some opposition…

Let’s review the main scenarios:

• A bearish bounce at yesterday’s high indicates a large retracement lower (pink arrow).
• Price could fall back to ET zone 7 where a bounce up could occur (purple arrow).
• A break above the high has potential for one more push higher (green arrow).
• A new higher high is likely to see a pullback (orange arrow) before hitting ET 8.
• A larger retracement could finally take place once the uptrend loses its steam. A potential reversal spot could be ET zone 8 (red arrow).

Four-hour chart

Four-hour trend bounced at ET 8

The 4 hour chart neatly use the ET 8 zone as a support level, after a corrective pattern we warned for on FXstreet (purple box). NQ 100 bearish retracement coming soon. Price is now at the previous top, which is a critical level.    

Let’s analyse the path of least resistance:

• A bullish breakout above the resistance level (red box) indicates a potential breakout (green arrow) towards the ET zone 9
• A bearish ABC retracement (orange arrows) is expected to take price back to the 21 ema zone and ET 8 level
• The uptrend might continue at that support zone (blue arrow)
• A bearish bounce could see a shallow pullback (red arrows) or deeper retracement first
• How deep the retracement will decline depends on the momentum of price action and whether price bounces at the bottom of the 21 ema zone (pink arrow) or not.