Charts counsel the Nasdaq 100 continues to be in robust technical spot

Charts suggest the Nasdaq 100 is still in tough technical spot

The Nasdaq 100 nonetheless faces an unsure near-term outlook regardless of its intraday turnaround Monday and extra positive aspects Tuesday, CNBC’s Jim Cramer stated, leaning on technical evaluation from Carolyn Boroden.

“The charts, as interpreted by Carolyn Boroden, counsel the tech-laden Nasdaq 100 actually was due for a bounce this week and that bounce might proceed,” the “Mad Cash” host stated. Nevertheless, Cramer stated to watch out as a result of Boroden believes “the general technical image stays ugly.”

Cramer stated Boroden recognized a possible bounce this week for the Nasdaq 100 by way of Fibonacci ratios, which she and different market technicians use to determine timing cycles that make clear when a safety could change path. The basis of the Fibonacci technique is a numerical sequence recognized within the thirteenth century by Leonardo Fibonacci, an Italian mathematician.  

Technical analyst Carolyn Boroden recognized seven Fibonacci timing cycles this week.

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Whereas Cramer stated Boroden believes the tech rebound “might have legs,” it is not solely clear how lengthy they may final. In any case, he famous, tech’s late December power lasted for a few week and a half earlier than giving approach to the early 2022 weak spot.

Moreover, Boroden sees a minimum of two bearish technical indicators that counsel it could be tough for the index to enter a sustained upside transfer to new highs, Cramer stated.

The primary is that the Nasdaq 100 stays under its 50-day shifting common, Cramer stated, calling {that a} “kiss of loss of life for many chartists.” He added, “There are some huge cash managers on the market who comply with these charts, even when they will not at all times admit it.”

Nasdaq 100’s 50-day shifting common (inexperienced), five-day exponential shifting common (blue) and 13-day EMA (purple).

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The second is the Nasdaq 100’s five-day exponential shifting common and its 13-day exponential shifting common, Cramer stated. “When the five-day crosses under the 13-day, that is one in every of [Boroden’s] most dependable promote indicators, and proper now it is very a lot in impact for the Nasdaq 100.”

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