The Nasdaq 100 today dropped by 1.15% which clearly ends a spectacular June rally. Today marks the 3rd day of a slide with heavier than usual volume. It may be that Wall Street money managers are re-arranging their portfolios for the upcoming quarterly reports that the CEO and friends will be going over in early July.
Today’s selling in the hot Nasdaq 100 is not that painful for investors after the June run-up, but the drop in NVIDIA
SPDR Dow Jones Industrial Average ETF Trust
Heavily weighted Nasdaq 100 components Apple and Meta Platforms ended the day in the green. Amazon and Microsoft each had a down day.
The weekly chart for the index looks like this:
The Nasdaq 100 continues to trade well above both its 50-week moving average (the blue line) and its 200-week moving average (the red line). The red-dashed lines indicate previous lows where buying support may be lurking should a more significant sell-off develop.
The April 2024 low near 17000 is of interest to technical analysts. Note that the 50-week moving average seems about to make it up to just that level. The next area of possibly significant support would be the October 2023 low of about 14000 where buyers returned in numbers.
Here’s how the daily Nasdaq 100 price chart looks now:
I’ve red-circled the 2 gaps-up that have occurred in June — these are sometimes price targets for active traders. There’s a 3rd gap-up in early May between 17500 and 17750. The red-dashed line at the mid-April low indicates a possible support area as buyers showed up there back then.
Note that Friday’s selling volume bordered on spectacular (where the blue arrow points). The relative strength index (RSI, below the price chart) has exited the “overbought” range as of today’s close.
The hourly price chart for the Nasdaq 100 is here:
This close-up shows more clearly where the June gaps-up took place — they’re red-circled. Note that here, on the hourly version, the price has dropped below the 50-hour moving average and it may be about to begin trending downward. Also: the RSI has reached the “oversold” range.
Because so many are interested, here’s the daily price chart for NVIDIA:
That’s 3 red candlesticks in a row, not something you see on a NVIDIA price chart too often.
The unfilled gaps-up are red circled, one in May and the other in February. There are no guarantees, but these spots may be targeted by active traders or by the active computer programs in use. That red-dashed line at 75 indicates the level in April where significant buying entered and reversed the direction of price.
This is not investment advice. It’s for educational purposes only.
More analysis and commentary at johnnavin.substack.com.
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