NASDAQ Index, SP500, Dow Jones Analysis – NASDAQ Pulls Back After Testing New Highs

Key Insights

• SP500 tested resistance at 4575 but lost momentum and pulled back towards the 4560 level. 
• NASDAQ moved lower as traders focused on profit-taking. 
• Dow Jones made an attempt to settle above the resistance in the 35,000 – 35,100 range. 

SP500

SP500 tested new highs despite disappointing housing market reports. Building Permits decreased by 3.7% month-over-month in June, while Housing Starts declined by 8%. The market sentiment remains bullish, although traders may be ready for profit-taking as RSI on the 4h chart remains in the overbought territory.

Taking a look at the daily chart, SP500 tested resistance at 4575 but failed to develop additional upside momentum, which is not surprising as the index moved into the resistance area after a strong rally. SP500 will need significant positive catalysts to settle above the 4575 – 4600 area in the near term.

NASDAQ

NASDAQ has already started to pull back after an attempt to climb above the 15,900 level. Profit-taking is the main catalyst for this move. While traders remain extremely bullish on AI-related stocks, NASDAQ may be ready for a technical pullback.

RSI on the daily chart remains in the overbought territory, so the risks of a pullback are increasing. The nearest material support level is located in the 15,200 – 15,300 area, so NASDAQ may gain downside momentum in case the pullback begins.

Dow Jones

Dow Jones tested resistance in the 35,000 – 35,100 range as the rally continued. The strong rebound of the Verizon stock provided support to Dow Jones, but the pullback in Microsoft shares limited gains.

Dow Jones bulls enjoy eighth session without a pullback, which may be a bearish catalyst as RSI has just moved into the overbought territory, boosting traders’ desire to take some profits off the table.

For a look at all of today’s economic events, check out our economic calendar.