As the S&P 500 futures continue their ascent toward a fresh all-time high, currently only about 12 to 13 points away, the NASDAQ index warrants a detailed look, especially from a broader technical perspective.
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Yesterday's price action touched near the upper bounds of this channel, indicating the strength and validity of the ongoing bullish momentum. However, it's essential to closely watch for potential breakdown signals, such as two consecutive hourly candles closing below the current ascending channel. Such a scenario would confirm a bearish activation, although traders should remain cautious about possible fake-outs.
It's important to recognize occasional sharp price movements, referred to as "shoot-offs", often attributed to market makers. These movements typically serve dual purposes: triggering stop-loss orders positioned by bullish traders and enticing new bearish participants into premature short positions. This activity helps market makers absorb liquidity, and traders should factor these dynamics into their risk management strategies, but we have to identify, within the technical analysis, when patterns are still in play, despite of these events. See that video for one example.
Previous 2025 High: 22,318
The recent breach of the previous all-time high (22,318) earlier this week underscores the robust bullish sentiment. Given the current market conditions, further upside towards 22,550 and potentially higher levels (22,700–22,800) within the upper region of the ascending channel is plausible.
Currently, the NASDAQ remains in a bullish configuration. Traders anticipating deeper retracements must note that as indices approach critical highs, retracements typically become more pronounced. Reasons include:
Inventory Unwinding by Large Players: Institutional investors holding significant long positions generally scale out in multiple stages, creating structured retracements and patterns such as wedges with multiple legs down.
NASDAQ Still Favors Bulls, Even Though Entries Are Now Harder
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This analysis is intended for educational purposes and does not constitute financial advice.
This article was written by Itai Levitan at www.forexlive.com. Read More Details
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