NQ 100 bearish retracement coming soon

The Nasdaq (NQ100) has made a huge move upwards – as we mentioned last week in our article “NQ Bulls Checkmating Bears in Strong Impulsive Uptrend. Now that price action has made a higher high, we see strong signals that a bearish retracement is highly probable.

Daily chart

Uptrend running out of steam

The bullish price swing was extremely impulsive (blue diamond) along with dominant bullish candles. However, price action is showing signs of exhaustion at a key resistance level as the HMA pace and angle are slowing down. Let’s review the main factors:

• The yellow EX signs on top of the candlesticks indicate our alert indicator for exhaustion.
• Price action has reached a key ET zone 7, which is a key distance from the 144 ema close.
• A retracement back to the 21 ema zone is likely sooner or later as the current angle of the trend is not sustainable in the long run.

Four-hour chart

Four-hour trend at critical ET zone 8

The four-hour chart has been in uptrend since the start of April. Especially after April 9, the uptrend started to pick up extra momentum according to our chart background (green colour).

Our roadmap radar explained – here is what price action is expected to do in our view:

• Price action could still push higher for a new higher first (green arrow).
• But ultimately sooner or later, a bearish retracement is becoming more and more likely (red arrows).
• Eventually price action will find support (blue arrow)
• On the 1 hour chart, price action has been extremely long above the 21 ema zone.
• Price has even extended above ET zone 9 – which is showing how far price action has moved away from the 144 ema zone.
• A breakout below the 21 ema zone (green band) could finally start the bearish pullback towards the 144 ema (red arrow).

One-hour chart