Hi Traders! NASDAQ short term forecast follow up and update is here. On August 30th I shared this “NASDAQ Short Term Forecast And Technical Analysis” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club. Spoiler alert – free memberships are available!
My Idea
On the H4 chart, we could see that the price which is moving lower has created a bearish trend pattern in the form of three lower highs and, lower lows we may consider this as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently, it looks like the correction is happening in the form of potential double wave to the upside. Also, we could see the price has created a bearish divergence between the first high that has formed on 24th August 2023 and the second high that has formed on 30th August 2023 based on the RSI indicator. We may consider these as signs indicated by the market that the buyers are losing control and the sellers are currently having the upper hand. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme (80 level) which we may consider as another sign favouring the sellers. In addition to this, currently there are no signs opposing this short term bearish view. So based on all this, until the two strong resistance zones (marked in red) shown in the image below hold my short term view remains bearish here and I expect the price to move lower further after pullbacks.
NASDAQ H4(4 Hours) Chart Current Scenario
Based on the above-mentioned analysis my view was bearish here and I was expecting the price to move lower further until the two strong resistance zones hold. The price action followed my analysis exactly as I expected it to here. The price which was moving higher created a false break of the first strong resistance zone, respected it and then it moved lower from this zone. In addition to this, the price which was moving higher created a bearish divergence between the first high that has formed at 15378.29 and the second high that has formed at 15638.24 based on the RSI indicator. The price then moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view and also there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower further and provided an extraordinary move to the downside!
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bearish view here, and there were no signs against it. When the facts do happen as we expected, you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us with the majority of the time, it’s our obligation as traders to be able to listen to these things that the market tells us, and we should try to make the right actions accordingly.
For similar trade ideas and much more I invite you to
Also, you can get one of our strategies free of charge. You will find all the details here
Download our best forex indicators here
If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Home Trader Club Team.
