NASDAQ forecast for the week of October 20, 2014, Technical Analysis

The NASDAQ fell significantly during the course of the week as stock markets in general struggled. However, the market found enough support at the vital 4100 level to turn things back around and bounce. The bounce formed a nice-looking hammer, which sits just below the 4300 level. Because of that, we feel that this market could very easily go higher, if we can clear that aforementioned 4300 level. On that move, we would head to the 4600 level next in our opinion, and we believe that the uptrend would continue going forward.

The NASDAQ does seem to have a significant amount of support starting at the 4100 level, but that also extends all the way down to the 3950 level. Because of this, we feel that the market is going to be held aloft buying the region that we just tested, so even if we pullback at this point in time we look at that as value more than anything else. In fact, it is not until we are below the 3950 level that we would consider selling this marketplace as that would signify a significant breakdown in the support system.

Going forward, we feel that the 4600 level of course will be resistive, but if we can get above there it appears that the market could go much higher. We feel that the market is probably heading to the 5000 level next given enough time, but keep in mind that it will of course be choppy and at the whims of headlines around the world. Because of this, the market looks very interesting at this point in time because the hammer is so perfect in its shape.

Looking at the trend, it is a very gentle slope that we are calling the trend, and therefore it feels to us like there is still plenty of momentum to be had as the market should continue to see buyers step in as the market is far from been overbought, and we believe that will be the way this market moves going forward.