Nasdaq 100 Technical: Potential start of minor corrective decline – heochaua

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<li><strong>Bearish reversal candlestick formed yesterday, its steepest daily loss since 27 October 2023.</strong></li>
<li><strong>Odds now have skewed towards a potential minor corrective decline sequence within a medium-term uptrend phase.</strong></li>
<li><strong>Watch the 16,800 key short-term resistance.</strong></li>
</ul>
<p>This is a follow-up analysis of our prior report, <em>“Nasdaq 100: It’s all about liquidity to maintain current bullish momentum” </em>published on 13 December 2023. Click <a href="https://marketpulse.com/fundamental/nasdaq-100-its-all-about-liquidity-to-maintain-current-bullish-momentum/kwong">here</a> for a recap.</p>
<p>The price actions of the<a href="https://www.oanda.com/sg-en/trading/indices/"> US Nas 100 Index</a> (a proxy for the Nasdaq 100 futures) have continued to rally and surpassed the 16,590 short-term resistance as highlighted in our previous analysis and the former 16,772 all-time high printed on 22 November 2021.</p>
<p>It continued to inch higher yesterday, 20 December during the first half of the US session where it rallied by +0.3% intraday and printed a fresh all-time high of 16,898. But it could not maintain its initial bullish momentum and reversed down to end the US session with a daily loss of -1.37%</p>
<h2><strong>Steepest daily loss since 27 October 2023</strong></h2>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-10-55.png"><img loading="lazy" class="alignnone wp-image-809180 size-large" src="https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-10-55-1024×584.png" alt="" width="700" height="399" srcset="https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-10-55-1024×584.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-10-55-300×171.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-10-55-768×438.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-10-55.png 1508w" sizes="(max-width: 700px) 100vw, 700px" /></a></p>
<p>Fig 1: US Nas 100 medium-term trend as of 21 Dec 2023 (Source: TradingView, click to enlarge chart)</p>
<p>The US Nas 100 Index has formed a daily “bearish Marubozu” candlestick with a daily loss of -1.37% which is the steepest daily decline since the medium-term uptrend kickstarted on 27 October 2023.</p>
<p>These observations suggest the prior seven consecutive weeks of higher positive closes are likely to give way to a potential mean reversion decline sequence; at least a short-term multi-day corrective decline to retrace a portion of the enormous swift rally of +20% from the low of 23 October 2023 to yesterday’s fresh intraday all-time high of 16,898.</p>
<h2><strong>Short-term bullish trend exhaustion </strong></h2>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-40-00.png"><img loading="lazy" class="alignnone wp-image-809181 size-large" src="https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-40-00-1024×584.png" alt="" width="700" height="399" srcset="https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-40-00-1024×584.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-40-00-300×171.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-40-00-768×438.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/12/NAS100USD_2023-12-21_13-40-00.png 1508w" sizes="(max-width: 700px) 100vw, 700px" /></a></p>
<p>Fig 2: US Nas 100 minor short-term trend as of 21 Dec 2023 (Source: TradingView, click to enlarge chart)</p>
<p>Its price actions have broken below a minor ascending channel support from the 7 December 2023 low as depicted on the hourly chart.</p>
<p>The retest seen yesterday, 20 December on the former ascending channel support turned pull-back resistance has been accompanied by a bearish divergence condition flashed out on the hourly RSI momentum indicator at its overbought zone.</p>
<p>These short-term bearish elements have reinforced the potential start of a minor corrective decline sequence within its medium-term uptrend phase that is still intact.</p>
<p>If 16,800 key short-term pivotal resistance is not surpassed, the Index may see the next immediate support coming in at 16,430 and a break below it exposes the next support at 16,160/125 (also the upward sloping 20-day moving average).</p>
<p>On the flip side, a clearance above 16,800 invalidates the minor corrective decline scenario for a potential continuation of the bullish impulsive upmove towards the next immediate resistances of 16,950/990 and 17,150/200.</p>