The Nasdaq 100 #NDX technology index has reached the all-time high of 15,621 and has stopped its upward movement just below the +2/8 line of murray that represents extremely overbought market conditions and an imminent downward correction.
The USDX dollar index has fallen below the 200 EMA which gives it a bearish outlook, and in turn it has given momentum to the Nasdaq. Besides, the cautious statements of US Fed's Chairman Jerome Powell helped the Nasdaq100 to arrive at the 15,621 level.
In the keynote speech on Friday, the Federal Reserve's leader said that the central bank could begin tapering its asset purchases by the end of the year if the US economy holds up and improves in the coming months. Powell reiterated that the increase in inflation would be temporary.
The Nasdaq 4-hour chart shows that the index is trading within an uptrend channel. If you look at the chart, it has been testing the upper line of the channel since July 8. Yesterday, the price touched this channel and also the line of +2/8 murray.
There is a probability that in the next few hours there will be a downward correction movement to the SMA line of 21 located at 15,404. A technical rebound could occur in this zone and there will be a good opportunity to buy.
If the downward pressure prevails and the Nasdaq consolidates below the 21 SMA, there could be a decline to the 200 EMA and the 8/8 murray line, which represents the psychological level of 15,000. Additionally close to this zone, the bottom of the line of the bullish channel is located.
The 200 EMA in 4-hour charts will be a good level to buy the Nasdaq 100 due to the fact that the bullish channel support line is located at this level and serves as the strong 8/8 Murray support.
The technical reading of the eagle indicator that measures the volume and strength of the market has reached the level of 95, showing an overbought signal with an imminent bearish movement in the next few hours. Therefore, you can sell below 15,621.
Support and Resistance Levels for August 31, 2021
Resistance (3) 15,703
Resistance (2) 15,664
Resistance (1) 15,625
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Support (1) 15,546
Support (2) 15,507
Support (3) 15,429
