Nasdaq moving toward key MA support and swing area support. Will the buyers show up?

<p>The NASDAQ index has moved lower over the last 4 trading days and currently trades down around 1% on the day. The index has moved down -1.14% to -1.17% on 3 consecutive days…</p><p> That decline has pushed the price closer to a swing area between 13101.18 and 13181.09. Also in sight is the rising 100-day moving average at 13070.54. The low price has reached 13161.76 so far today. So the price has moved within the swing area, but is it still a distance away from the key 100-day moving average. The last time the price moved below the 100-day moving average back in March for a single day. Moving below that moving average would increase the bearish bias.</p><p>The swing area and the moving average may give dip buyers a reason to buy, and also a borderline to lean against if they are wrong.</p><p>What might also tempt buyers is that the RSI index is approaching oversold levels near the 30.0 level. When the RSI gets that low, there is a tendency to slow the decline. However, traders must be careful as trending markets are fast, directional, and can move farther than what traders expect. As a result, the RSI can remain oversold and get even more oversold. </p><p>Hence the importance of leaning against the swing area and the 100-day moving average. Each provides a borderline for the dip buyers. If the price were to move below the swing area and 100-day moving average, get out. Those are your risk-defining levels. The RSI is just a tool to give traders a "heads-up" for a potential oversold condition. </p>

This article was written by Greg Michalowski at www.forexlive.com.