Analysis and Opinion »

Nasdaq on the Ropes

David Becker
Share on StockTwits
Published on

The Nasdaq did some technical damage on Friday and could continue to experience negative sentiment over the next couple of weeks. April is generally considered a very good month for stocks and on average, of the past 25 years the Nasdaq composite has rallied 1.3% 65% of the time in April.

The Nasdaq composite pierced through both the 50-day and 100-day moving average on Friday. This occurred in February but the composite was able to quickly bounce back and recapture these technical levels and move on to generate 14-year highs. Resistance on the index is now seen at former support near the 100-day moving average at4151.

Momentum on the Nasdaq is negative with the MACD (moving average convergence divergence) index printing in negative territory with a downward sloping trajectory that foreshadows future negative price action. Additionally, the RSI (relative strength index) which is a momentum oscillator that measures overbought and oversold levels is printing near 37, which is on the lower end of the neutral range.

Share on StockTwits