Hi Traders! NASDAQ short term forecast follow up and update is here. On April 6th 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 H1 chart, we could see that the price which was moving higher has created a bearish divergence between the first high that formed at 13195.99 and the second high that formed at 13235.24 based on the MACD indicator. The price then moved lower and broke below the last low at 13043.74 creating lower lows, thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidence of bearish pressure. Generally, after a bearish convergence, we may look for corrections and then a further continuation lower. Currently, it looks like a correction is happening. In addition to this, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads a value over 25 which we may consider as yet another evidence of bearish pressure. Until the key resistance zone (marked in red) shown in the image below holds my short-term view remains bearish here and I expect the price to move lower further after pullbacks.
On the H1 chart, based on my technical analysis, I mentioned that “until the key resistance zone holds, my short-term view remains bearish here, and I expect the price to move lower further after pullbacks” The price action followed my analysis exactly as I expected it to here. We had a pullback and then the price provided a first move to the downside. We then had a deeper pullback, but most importantly the price was holding below the key resistance zone. The price then provided a second move to the downside and delivered an excellent move as you can see in the image below!
On the H1 chart, the market provided us with various facts supporting the bearish view. The price, which was moving higher, created a bearish divergence between the first high, formed at 13128.24 and the second high, formed at 13205.04 based on the MACD 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 were no signs opposing this bearish view. Then as you can see in the image below, how the price moved lower further after that and provided an excellent 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.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
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