Chart of the day Nasdaq 100 pull backed towards key medium term support

Short-term technical outlook on US Tech 100 (Wed, 23 May)

Key technical elements

• The US Tech 100 Index (proxy for the Nasdaq 100 futures) has continued to tumble in today, 23 May Asian/European sessions reinforced by U.S President Trump’s “lukewarm” comments on U.S./China trade relations where he was not happy with the recent trade talks and added that U.S. may opted out in the upcoming U.S./North Korea Summit in June. The Index has pull-backed by 1.8% from its recent minor high of 6948 seen yesterday, 22 May to print a current intraday low of 6823 in today, 23 May European session.
• The Index is now hovering just above the 6745 key medium-term support which is defined by a confluence of elements. The lower boundary of an ascending channel from 04 Apr 2018 low, the former minor swing high area of 27 Apr 2018 and a Fibonacci cluster (50% retracement of the recent up move from 03 May low to 14 May 2018 high & 1.00 projection of the on-going pull-back from 14 May high to 15 May low projected from yesterday, 22 May high of 6948) (see 4 hour chart).
• There are no clear signs of a medium-term bullish exhaustion in price action as indicted by the daily RSI oscillator where its current decline has not been accompanied by a bearish divergence signal. In addition, the 4 hour Stochastic oscillator has reached its extreme oversold level at 3%. These observations suggest that the recent decline from 14 May 2018 high of 7007 is likely a minor corrective pull-back within a medium-term up trend in place since 04 Apr 2018 low rather than a trend reversal where the on-going pull-back is being “overstretched”.

Key Levels (1 to 3 days)

Intermediate support: 6800

Pivot (key support): 6745

Resistances: 6870 (upside trigger), 6950 & 7000

Next support: 6530

Conclusion

Therefore, as long as the 6745 key medium-term pivotal support holds and a break above 6870 may see a recovery to retest the intermediate resistances at 6950 follow by 7000 in the first step.

However, failure to hold at 6745 shall invalidate the medium-term uptrend to kick start another round of choppy decline towards the next support at 6530 (the lower boundary of the major primary ascending channel from Jun 2016 low.

Charts are from City Index Advantage TraderPro

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.