Nasdaq (NDX QQQ) Technical view, key chart levels, Nasdaq tests trendline support


  • Nasdaq (NDX QQQ) rallies on Friday but stalls at resistance.
  • Nasdaq found support on Thursday at 50 day moving average and trendline.
  • Nasdaq (NDX QQQ) now at trendline support.

Update Monday, May 10: The Nasdaq is trading nicely from resistance to support. Friday's rally stalled at the convergence of the 9 and 21-day resistance. Monday sees the resistance work well and so the Nasdaq sells off and currently finds support at the lower trendline seen in the chart below. A close below will target 12.883 the lower trendline.

qqq

Update Friday, May 7: A terrible jobs report on Friday (266k versus 1m expected) has seen long-duration stocks rally as rates dump. The Nasdaq takes the narrative and rallies up to the convergence of the 9 and 21-day moving averages. Yields drop to 1.5% for the ten year and the Fed taper is pushed further into the distance.

A close above the 9 and 21-day resistance should see the Nasdaq target new highs on Monday, above 14070. 

 

The Nasdaq sits at a key juncture as it opens for trading on Thursday. Recent strong earnings from big tech have put the spotlight on the underperformance of the Nasdaq versus other major indices. We can see below how pronounced this has become over the last month. Is the Nasdaq the canary in the coal mine? 

Nasdaq v S&P

For now, the Nasdaq is just holding key support at the trendline but it looks likely to break as Thursday progresses. This level is currently 13445. This level may function well as a buy the dip strategy as the 50-day moving average support comes in just below.

A break of this area and the Nasdaq will target the 100-day moving average at 13,147 and an ultimate test of the lower trendline at 12,500.

The trend is assuredly negative in the short term. We can see how well the 9 and 21-day averages held the move on the way up and now the Nasdaq has broken both. The repeated failure at breaking the 14,060-14,070 range was a catalyst. This move was confirmed by the muted reaction of the Nasdaq to record-breaking results from the likes of Facebook, Apple and Amazon to name but a few. 

The admittedly lagging but useful indicators such as the Moving Average Convergence Divergence (MACD) confirmed this failure to breach 14,060-14,070 by flashing a crossover sell signal. The RSI was also warning us of growing stretched valuations but has since retraced as price has fallen.

Nasdaq

Nasdaq Key levels

Support Resistance
13,495 50-day MA 13,699 9 & 21 day MA
13,445 channel 14,060 -14,070 highs, line
13,296 March 16 high  
13,147 100-day MA  
12,500 channel  
12,209 March 3 low  

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