Nasdaq on the Ropes
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.
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