Will The Nasdaq Composite Index Continue To Move Higher?
2023.12.07 03:30
The Index has been trading sideways for sometime. As it reaches a former high in the daily chart, there is no doubt some resistance will kick in.
Sometimes the index may meet this resistance with a correction. But at other times, the index may consolidate or trade sideways before moving higher.
daily chart of the Nasdaq Composite Index
As you can see from the daily chart of the Nasdaq Composite Index above, there is quite a lot of resistance overhead. At this moment, the Nasdaq is sitting at the 20 MA and it is consolidating at a prior high support.
Support is an area and not a definite point. So far the Nasdaq is trading above the support area which I have highlighted above in green. Watch this area carefully. If Nasdaq is able to continue to trade above this area, then it is very likely to breakout higher in the near future. Otherwise a correction to the 50 MA (blue line) is possible.
One positive thing to take note is that the 200 day moving average is still rising. This points to the long term health of the Nasdaq Composite Index.
weekly chart of the Nasdaq Composite Index
Let’s zoom out a bit now and take a look at the longer term picture which is the weekly chart of the Nasdaq Composite Index.
Recently, the Nasdaq Composite broke out of a weekly flag but it is still having trouble moving up because of the resistance on the left. Resistance areas take time to be overcome.
We can take a measured move target and this is about the area of the previous all time high.
One thing that is positive is that the weekly 50 MA and the weekly 200 MA is rising and this paints a healthy long term picture for us.
60 min chart of the Nasdaq Composite Index
Now that we are done with the daily chart and the weekly chart, a trader needs to take a look at the short term chart. This is because we want to enter or exit at the right time. A good timeframe is the 60 min chart.
The Nasdaq Composite Index is still trading above the support area with the 60 min 200 MA still rising. The 60 min chart tells us that the index is still consolidating or trading sideways. We need to be patient and wait for a breakout.
As long as the index stays above the 60 min 200 MA and stays above the support line then we should treat it as a short term sideways trend.
Once it breaks out of the consolidation, we can be bullish on the index and it is very likely to resume moving upwards and start a new stage 2 uptrend in the 60 min chart.
