The NASDAQ Composite Index has experienced a short bearish trend the past week of trading after hitting new highs. Some technical traders may look at the 11,070.0 juncture and say it was a classic double top which caused the market to reverse downwards. However, the famed index remains near its all-time highs and looks comfortably positioned via a 3 month chart for another attack upwards.
Making things more interesting is the fact that the current price action of the NASDAQ Composite is near values made around the 7th and 8th of July before it pushed upwards towards record highs on the 13th and 21st of the month. Trading is never a one way street, direction of the markets intra-day always has ups and downs and even as the NASDAQ challenges all-time highs it certainly will suffer from selling periodically.
Key support for the NASDAQ appears to be the 10520.0 level; if this juncture is broken lower it could signal a stronger bearish trend and retest the 10400.00 juncture. However, if trading can consolidate within its current price vicinity of 10560.0 to 10600.0 the index may be setting itself up for more bullish momentum.
The NASDAQ Composite in many respects has been the leader of pact when global indices are looked at and risk appetite is discussed by investors and speculators. Questions about being overvalued are definitely legitimate, but again market value is dictated by what investors are willing to pay for an asset while hoping it rises in value. Yes, speculators can sell the NASDAQ Composite short and hope to make money by shorting the marketplace based on a belief there will be an erosion of value. But do you really want to bet against the long term trend of the NASDAQ Composite short term?
Traders may want to seek additional pullbacks before buying the NASDAQ by using limit orders near the 10550.0 juncture. But if a trader is looking to get into this market, they might miss upside potential if they are too cautious. Risk appetite is an important aspect of speculating, the NASDAQ Composite is one of the key elements which guide speculative zeal within the global markets. After sustaining some short term bearish trading the past week, speculators may believe now is the time to look for reversals higher and the long term bullish trend of the NASDAQ to re-establish itself.
NASDAQ Composite Index Short Term Outlook:
Current Resistance: 10650.0
Current Support: 10520.0
High Target: 10785.0
Low Target: 10400.0
