22 Feb Nasdaq Long Term Price Projection
Having Day Traded FTSE and DOW for a few years I’ve built up an over-familiarity with them that skews my judgement when making long term forecasts. Furthermore, it’s not often that I’ll swing trade these Indices because again, my familiarity with them causes me to cut positions too early for the wrong reasons, i.e I’m so used to their constant twists and turns, I’ll often exit a swing trade with a view to re-entering at more favourable levels only to end up missing the re-entry opportunity and missing the bulk of the swing move.
However, I’ve never day traded the Nasdaq, so when it comes to longer term forecasting Nasdaq is sometimes where I turn.
Interestingly this is potentially a very bullish long term chart when using basic price projections against the current trend that forcefully broke out from a long winded consolidation.
It’s very common for a break-away gap to eventually become both support and a future Fibonacci retracement level and in the case of the Nasdaq daily chart we could have actually used that gap to predict this Week’s high as far as a Month ago. Fibonacci projections are something of a black magic, but they can work well, noting on this occasion all of the Fibonacci levels have lined up with price supports.
Furthermore in the same chart, if we use the high to low distance of the 2011 consolidation area as a price projection for the break-out that followed, we get a potential long term upside target in the 2880 to 2900+ region:
Moving out to the Monthly chart to see what kind of resistance lies immediately ahead, we find that there’s very little in the way of resistance right up to…. you guessed it, 2900:
So moving back to the daily chart with the Fibonacci tool in position, and making the assumption that price should retrace from the current level, we have 2 potential retrace targets, one at the 23.6% fib retracement level circa 2491 and a more solid support combined with the 38.2% retracement level at circa 2430
I’m not kidding myself here, this is very early days for such an optomistic upside target, more so when the fundamental world around us appears to be falling apart, but a retrace finding support at either of the 2 aforementioned levels will have me interested in a swing long position that should slice through all of the fresh air above and achieve the target zone of 2900
Just as a disclaimer, I’m a bear by nature but I don’t let that cloud my judgement where T.A is concerned, and if we see the right price action in the shorter term to validate this potential skywards move, I’ll be happy to put my money on it.