#202505 - priceactiontds - weekly update - nasdaq

Good Evening and I hope you are well.

comment: Huge rejection right under the previous lower high, which now makes it 3 failed attempts to get above 22k and find acceptance. The selling on Friday was surprising enough to expect follow-through because many traders got trapped.

current market cycle: trading range

key levels: 20000 - 22500

bull case: Bulls need to keep this a higher low above 21400 or risk that market will go much lower to 21200 or even 20600. The 50% retracement of this trading range is 21600 and market stopped around that price on Friday. No matter how you want to draw this right now, it’s either a descending triangle or a trading range and the bulls are not favored to buy this rejection again. They need a bigger surprise than the bears on Friday to stop this from going down.

Invalidation is below 21400.

bear case: Bears have now the best chance of doing another deep pullback below 21000. The surprise on Friday was big enough that we can expect follow-through selling. First bear target is to make a new low below 21419 and then we have 21200 as bigger previous support. Last target for next week would be around 20800 where market decides if we make lower lows or continue in this trading range under the ath. If you look at the weekly NDX chart, you can see that we are also in a bigger diamond pattern, which is just a form of a trading range with expanding and now contracting ranges.

Invalidation is above 22000.

short term: Bearish. I do think the top 21965 will hold and we go down from here. For now I doubt we will make lower lows below 20800 though.

medium-long term - Update from 2024-01-27: High’s are most likely in. Any short with stop 22200 is good. I’d like to see 20000 over the next 2-3 weeks.

current swing trade: None

chart update: Added bear trend lines