1-hr NASDAQ 100: The Leading Tech Index Might Correct In 5 business days US100 jumped with more than 600 points. We use patterns like the Golden Cross, where a short term MA breaks above a longer term MA, to determine the strenght and the direction of the momentum. The classic buy signal, triggered by the Golden Cross, emerged last week and since then buyers in the NASDAQ generated fantastic profits! For the past few hours today however, we notice a possible slow down in the upward momentum. This is only normal, because many of these buyers are going to start selling, to take profit, after the rally. We use Fibonacci to establish where the price might correct to and we usually focus on the critical levels 38% Fib and 50% Fib. Tech stocks are hot, rates are dropping and on the long run it is very possible that the index will continue its upward march. On the short term however, its absolutely normal to see some pullbacks. We assume that buyers could secure better risk to reward on their trades, if they target a lower entry, possibly at 21 250, which aligns with the important 38% Fibonacci retracement. This also opens the room to short sellers, who wish to bet on a short term drop and take this level as a potential profit taking zone.
