The Nasdaq Composite slid to its lowest level since July 31 this week, breaking below its 100-day moving average before buyers stepped back in. The index has since reclaimed its 100-hour and 200-hour moving averages, but it still sits beneath a resistance band that has turned back every rally attempt since spring.
On Wednesday, the Nasdaq Composite fell to its lowest level going back to July 31 and broke below its 100-day moving average. The drop pushed the index into a swing area with a low near 25,802, close to the top of a deeper zone between 25,799 and 25,190. Sellers tried to extend the break lower but could not.
Buyers reclaim the hourly averages
Buyers stepped back in, and the rebound carried through the following session. The index climbed back above its 100-hour and 200-hour moving averages, at 26,292.53 and 26,347.91 respectively. The session's low held above the higher of the two averages, at 26,346.62, with buyers trying to keep control above those levels.
Reclaiming both moving averages shifts the short-term edge back to buyers. However, it does not settle the larger fight over the index's direction.
A resistance band tested eleven times
The index still sits beneath the resistance band between 26,676.31 and 26,856.24, a zone that has capped every rally attempt since spring, across eleven separate tests. Buyers need a sustained move above 26,676.31 to open the door toward the all-time high at 27,190.21. Sellers, in turn, need to push the index back below the 200-hour and then the 100-hour moving averages to regain the short-term bias.
Downside levels if sellers regain control
If sellers retake control, the 61.8% retracement at 26,123.33 is the first target below the moving averages. The daily 100-SMA at 26,042.52 and the 25,978.42 to 25,910.82 swing floor come next. A break of that floor would reopen the deeper 25,799 to 25,190 swing area already tested this week, with the 38.2% retracement at 25,474.91 sitting just beneath it.
Source: Investinglive.com
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