The Nasdaq 100 cash index traded higher on yesterday, after hitting support near the 16305 barrier, and returned back above the 16430 zone, which acted as the upper end of the sideways range that was containing most of the price action from October 25th until today. With that in mind, we will consider the short-term picture to be positive.
Currently, the index is testing the 16570 barrier, marked by the high of December 30th, the break of which could target the peak of December 28th, at 16660. If they don’t stop there, we could see them touching the all-time high of the index, at around 16770, hit on November 22nd. Another break, above 16770, will take them into uncharted territory, with the next territory to consider as a resistance perhaps being the round figure of 17000.
Our short-term oscillators detect upside speed and add to the chances of further advances in this index. The RSI rebounds from near its 50 line and looks to be headed towards 70, while the MACD, already positive, hast also turned up and has just crossed above its trigger line.
We will abandon the bullish case if we see a retreat back below the 16305 barrier. This may confirm the index’s return back within the aforementioned sideways range and may allow some more declines within that range. The first level to consider as a support after the dip may be the high of December 22nd, at 16200, the break of which could extend the fall towards the 15990 zone, marked by the inside swing high of December 21st. If the slide doesn’t stop there either, then we could see a test near the low of the day after, at around 15885.
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