Nasdaq Holds the Line: Bulls Defend Crucial Support

In today’s technical analysis, let’s focus on the NASDAQ, which is currently navigating a critical juncture on the chart. The index has just defended a key horizontal support level, highlighted in yellow, sitting slightly below the 21,500-point mark. This area represents the neckline of a massive head and shoulders formation, outlined by green rectangles.

Had this neckline been broken, it would have signaled a long-term sell-off for NASDAQ, likely setting off a wave of bearish sentiment and a potential market correction. However, buyers stepped in just in time. The price rebounded off this critical level, staging a solid bounce that reestablishes bullish control—for now.

Despite this relief rally, the pattern is still in play. A full invalidation of the head and shoulders structure would require a breakout above the red descending trendline, which connects the top of the head to the top of the right shoulder. This red line now acts as a mid-term barrier for the bulls. A clean breakout above it would not only cancel the bearish formation but could also spark renewed optimism and upward momentum.

While the odds of a breakout above the red line appear limited at the moment, the key support has held firm. The stage is set for a pivotal week ahead, with both buyers and sellers watching closely for the next decisive move.

Source: https://www.axiory.com/analytics/technical-analysis/nasdaq-holds-the-line-bulls-defend-crucial-support