« Broad Market Support | Main | Oil Services Not Impressed »
August 29, 2005
Nasdaq Support
The August trend is clearly down, but where can we expect support for the Nasdaq? First, the index recorded a new high for 2005 in early August and the current decline is viewed as a correction, provided it does not overstay is welcome. The April-July advance was quite sharp and some sort of pullback can be expected.
For support, I would look at key retracements, prior consolidations, moving averages and trendlines. A 38-50% retracement of the Apr-Jul advance would extend to the 2050-2100 area. This is a normal retracement after an advance. The rising 200-day SMA confirms this support zone, as does the June consolidation (gray oval). Therefore, I am establishing a support zone around 2050-2100 for the Nasdaq and will expect a bounce or consolidation in this area. A break below the support zone would be deemed excessive for a normal correction and this would turn the trend bearish.
Posted by Arthur B. Hill at August 29, 2005 07:25 AM