50 day MA and 38.2% retracement
The Nasdaq index is up about 65 points or 0.87% today at 7509. It reached a high of 7526 at the peak. The low reached to 7419.55. At the low, the index was down -25.5 points. A good comeback for the tech index.
What helped the rebound, was a nice bounce off a key support level.
Near the low, the index tested
- The 50 day MA at 7426 (white line in the chart above),
- The 38.2% retracement at 7424.35. (see chart above)
Now... the low did move below those levels, which was more bearish. However, looking at the hourly chart below, the index moved below the level during one hourly bar, but closed above that level on that bar (failed break). The buyers entered (see chart below) on that failure.
What next?
When stocks find and bounce off a good support, it can lead to more momentum back higher. However, the recovery can be more difficult.
The next key target would be near the 38.2% of the move down at 7567.408 and the 200 hour MA at 7579.198. I would expect some stickiness on a test, with a move above giving the buyers more confidence.
The Nasdaq is slipping a little more into the close, but the bounce today, may be what the buyers need get some of the bear out the price action of late.
