Technical Alert : Nasdaq 100 … Topping or breaking higher ?

Nasdaq 100 reached in August levels not seen since March 2000 when the index topped at 4816 to mark the end of the « Internet bubble » . The 2 years that followed saw a slump of more than 80%. The index is now back to the top and the long term chart here below  shows what could look like a triple top pattern – 2000 /2015 / 2016? .

Nasdaq 100 18 years

Let us review the shorter term 2 years chart and see what additional info we can get from it . The Index clearly « plays » with the top of a 2 years up trendchannel . Strong move up since early july (+10%+) was stopped a few days ago at the upper hand of the channel around 4840 and chops around since then. Critical levels lie now around 4850-4860 : should these levels be broken decisively on a daily closing basis, this would be a warning signal for more upside potential . A weekly close above these levels would definitely be bullish . This is NOT my favourite scenario at this time given some other indicators warning for a potential correction (MACD, RSI divergences,..) .

I set the trigger on the downside in the 4730-4750 range which acted as resistance back in 2015 and as strong support in the last 2 weeks .

Nasdaq 100 2 years

Conclusion : Bearish below 4730 on a daily closing basis (best if weekly). As long as the 4730-4750 range is not crossed i will give the benefit of the doubt to more bullish action .

  • – Click on the charts to enlarge –