Sizing Up the Nasdaq
The Nasdaq-100 is hitting its highest prices in over a month. Now could be a good time to review some patterns on the tech-heavy index.
Aside from simple levels, NDQ is above its 50-day simple moving average (SMA) for the first time since April 7. That could suggest a change in this year’s bearish trend.
Second, you have the series of higher lows since mid-June. Was that a bullish ascending triangle?
Also consider how the top of the triangle closely matches the March 2021 low, which held NDQ in check in late June and early July. Tuesday’s close could be a breakout through resistance.
Next are two custom scripts previously shared by TradeStation.
Distance from MA shows price’s distance from the 10-day SMA. Notice how it hit an overbought condition on June 2, followed by an oversold condition just seven days later. This is unusual because typically an overbought bounce follows an oversold condition. The combination -- followed by relative calm -- could represent the kind of final extreme swing occurring at the final stage of some trends.
The other script is 2 MA Ratio using its default setting of 8- and 21-day exponential moving averages (EMAs.) It plots the fast MA as a percentage of the slow MA. In this case it clearly shows the 8-day EMA rising above the 21-day EMA. (Moving these to an oscillator reduces clutter on the main price chart.) That crossover may also suggest that the trend has gotten more bullish.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
Aside from simple levels, NDQ is above its 50-day simple moving average (SMA) for the first time since April 7. That could suggest a change in this year’s bearish trend.
Second, you have the series of higher lows since mid-June. Was that a bullish ascending triangle?
Also consider how the top of the triangle closely matches the March 2021 low, which held NDQ in check in late June and early July. Tuesday’s close could be a breakout through resistance.
Next are two custom scripts previously shared by TradeStation.
Distance from MA shows price’s distance from the 10-day SMA. Notice how it hit an overbought condition on June 2, followed by an oversold condition just seven days later. This is unusual because typically an overbought bounce follows an oversold condition. The combination -- followed by relative calm -- could represent the kind of final extreme swing occurring at the final stage of some trends.
The other script is 2 MA Ratio using its default setting of 8- and 21-day exponential moving averages (EMAs.) It plots the fast MA as a percentage of the slow MA. In this case it clearly shows the 8-day EMA rising above the 21-day EMA. (Moving these to an oscillator reduces clutter on the main price chart.) That crossover may also suggest that the trend has gotten more bullish.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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