The Nasdaq Composite has spent the past several months fighting the same ceiling. Since late spring, price has tested the 26,676.31 to 26,856.24 area repeatedly without a clean, sustained break above it. This week added a new chapter to that fight.
On Wednesday, the index broke to the lowest level going back to July 31 and in the process fell below its 100-day moving average. That took the price into a swing area printing a low near 25,802, close to the top of a deeper swing zone between 25,799 (the 50% of the range since the start of June) and 25,190,. Sellers pushed had their shot at extending that break outside the up and down range, but they missed.
Withe buyers stepping back in, the rebound has carried through into today’s session with the price little changed. That move higher took the price yesterday back above the 100/200 hour MAs at 26,292.53 and 26,347.91 respectively. The low today at 26363.79 remains above the higher of the moving averages at 26346.62. Buyers are trying to keep control above those moving averages.
Technical analysis
Reclaiming both hourly moving averages shifts the short-term edge back to buyers, but it does not settle the bigger argument. The index is still working underneath the same resistance band that has turned it away multiple times since the spring: 26,676.31 to 26,856.24.
What buyers must do: get above 26,676.31 and stay above it. That is the level that has capped every meaningful rally attempt for months. A sustained move through it opens the door toward the all-time high at 27,190.21.
What sellers must do: turn this rally back the way they have before. A move back below the 200-hour and then 100-hour moving averages, would put the short-term bias back in their hands.
Downside levels if sellers regain control:
- 26,123.33 (61.8% retracement) is the first target below the moving averages.
- 26,042.52 (daily 100-SMA) and the 25,978.42 to 25,910.82 swing floor come next.
- A break of that floor reopens the deeper 25,799 to 25,190 swing area, the same zone this week’s low already tested.
- 25,474.91 (38.2% retracement) sits just beneath that.
What would change the view: losing both hourly moving averages and failing to reclaim them would put the rebound back on the defensive. On the other side, a clean close above 26,856.24, something that hasn’t happened yet through eleven separate tests, would be the clearest signal yet that buyers have finally worn the ceiling down.
Trading education: a level tested eleven times
The chart marks eleven separate tests of the 26,676.31 to 26,856.24 area going back to the spring. That repetition is the point. A level that price keeps returning to and keeps failing at builds significance the more it gets tested, because it shows a consistent group of sellers is willing to defend it at roughly the same price. The flip side matters too: if buyers ever do close above it, the fact that it was defended so many times is exactly what makes the breakout meaningful. In my book Attacking Currency Trends, I write about using levels like this to define both the bias and the risk. Confluence and repetition are what turn a line on a chart into a level worth watching.
This article was written by Greg Michalowski at investinglive.com.