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03.06.2022 05:11 PM
Trading Signal for Nasdaq-100 (#NDX) on June 3-6, 2022: sell below 12,765 (200 EMA - overbought)

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Nasdaq-100 Tech Index (#NDX) is trading around the 200 EMA located at 12,765. Yesterday, the index performed well above 3.5% reaching a high of 12,941 returning to the price levels of May 6.

Seeing as the Nasdaq-100 is pulling back and consolidating below the 200 EMA, a technical correction is likely in the next few hours and the index could reach the support of 4/8 Murray at around 12,500.

A close on 4-hour chart below the 21 SMA at 12,696 could be a clear signal to sell with targets at 12,500.

The 4/8 Murray around 12,500 has offered good support to the Nasdaq-100 since the beginning of the week which is likely to provide a technical bounce around this area.

A sharp break of 4/8 Murray and a daily close below this level could accelerate the bearish move and the price could quickly drop to 3/8 Murray at 11,875.

On June 2, the eagle indicator reached the extremely overbought zone. The odds are that there will be an imminent correction of the Nasdaq-100 and it could continue a fall until next week.

To regain its bullish bias, the Nasdaq-100 should have a daily close above 12,780. In case this happens, we should avoid selling and the upside is likely to resume. In this case, the index could hit 5/8 Murray at 13,125.

Our trading plan for the next few hours is to sell below the 200 EMA at 12,765, with targets at 12,690, 12,600 and 12,500. Additionally, if downside pressure prevails, we could sell if it breaks below 12,500 with targets at 12,300 and 11,875. The eagle indicator is showing an overbought signal which supports our bearish strategy.

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