Chart Of The Day: NASDAQ 100 Closes On Key Support

Andrew Nyquist

Large cap tech stocks had a rough day. And no other index measures this as well as the NASDAQ 100 (NDX).  The NASDAQ 100 closed down 1.36% as shares of Apple (AAPL) fell 2.71%, while fellow tech titan Facebook (FB) dropped 2.23%.

But what made the NASDAQ 100 so interesting today was its close at 4089, the third such trip to this level in the past month (this level also marks the September highs). Wben coupled with an ominous looking rounded top formation (no that’s not an umbrella), this level appears to be very important.

NASDAQ 100 – Daily Chart

nasdaq 100 important support line january 15 2015

But by the end of the day, several bloggers and tweeters had commented on the prospects of a Nasdaq “triple bottom”. And as a technician myself, it’s fair to note that triple bottoms are pretty weak… the more times price knocks on a level, the more likely it is to break.

Here’s a tweet from fellow contributor Steve Burns (@SJosephBurns) and author of the blog NewTraderU, looking at the NASDAQ 100 ETF (QQQ):

 

And another from trader Robert Lesnicki (@TraderRL23) showing the same setup:

 

On the flip side, perhaps too many eyeballs are on this level, making it more of a sentiment battleground. @DarvasTrader also highlighted this level, but added that today’s downdraft didn’t qualify as a distribution day due to low volume.

 

The price action tomorrow and into early next week should be telling. But the view from above doesn’t look so good right now. Trade safe.

 

Follow Andy on Twitter:  @andrewnyquist

No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

 

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