Volatility and Momentum Within Sideways Market on NASDAQ

In today’s analysis, we focus on the NASDAQ, which began the week with a bearish gap but quickly initiated a reversal to the upside. While the index is experiencing high volatility and momentum, the big picture reveals a sideways trend that has persisted for several months.

The price has been trading within a pennant formation, defined by a dynamic resistance (upper blue line) and dynamic support (lower blue line). After multiple swings within this range, these key boundaries have become well-established. As long as the NASDAQ remains between these lines, no clear long-term trend is likely to emerge, leaving traders in a holding pattern.

The approach to trading this sideways trend is straightforward:

• Buy Signal: If the price breaks above the upper blue resistance, it will confirm a buy signal, signaling potential for further upside.
• Sell Signal: A reversal candlestick pattern (e.g., a shooting star or bearish engulfing) forming at the upper resistance would indicate a sell opportunity.
• Support Breakdown: A break below the lower blue support would activate a sell signal and likely initiate a bearish move.
• Bounce from Support: Conversely, a bullish candlestick pattern (e.g., hammer or bullish engulfing) near the lower support would offer a buy signal.

For now, the NASDAQ remains in this neutral zone, and traders should watch for either a breakout or reversal at the key levels to determine the next major move.

Source: https://www.axiory.com/analytics/technical-analysis/volatility-and-momentum-within-sideways-market-on