NASDAQ Is In a False Bearish Breakout and a V-shape Reversal Again

Of course, with one ear they listen to the news from Ukraine but overall, all eyes are on today’s rate hike and the statement and press conference that will follow. Ahead of that, we can see huge optimism on the market. Stocks are climbing higher, safe havens are going down and oil is also following suit.

In this analysis, I would like to focus on NASDAQ, which is in a really interesting situation on the chart and is one step from a major buy signal. NASDAQ reversed quite sharply which is pretty common for American indices, they’ve done a V-shaped reversal many times. This time, it all started with a false bearish breakout (blue), below the horizontal support at 13150 points.

False bearish breakouts are usually a great signal to buy, I guess that will be the case here today as well. At the beginning, we said that we’re one step away from a buy signal. A buy signal, will be created once the price breaks the long-term down trendline (black), which connects crucial lower highs since the beginning of the year. Once the daily candle closes above, the buy signal will emerge.

Of course, we need to have a negative scenario at the back of our heads as well. It’s significantly less probable but if the price closes the day below the orange line, it will cancel the positive sentiment and trigger a long-term sell signal.