In recent trading sessions, investors have been selling off the NASDAQ 100 index to secure profits, leading to a substantial drop of 1,000 points since last week. This decline has been accompanied by a clear technical signal of bearish momentum: a "Death Cross," where the 20-period moving average (MA) has fallen below the 60-period MA, indicating a strong sell signal and confirming the downtrend.
Today, the index found temporary support, initiating a modest pullback that briefly pushed prices above the 20,495 level, aligning with the 23% Fibonacci retracement. If buying pressure persists, the index could potentially rally towards 20,620 (38% Fib level) or even 20,720, which corresponds to the 50% Fibonacci retracement.
These levels could serve as key resistance zones and present attractive entry points for traders looking to capitalize on the current bearish momentum by initiating new short positions. Entering short trades at these higher resistance points allows traders to follow the dominant downward trend while minimizing risk, should a stronger pullback occur.
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