The Nasdaq 100 experienced a 1.15% drop on Monday, marking the end of a strong rally throughout the month of June. This decline comes after three consecutive days of losses, possibly due to Wall Street money managers adjusting their portfolios ahead of upcoming quarterly reports in July. Despite the drop, investors are not too concerned given the substantial gains made in June. However, the SPDR Dow Jones Industrial Average ETF Trust, a key component of the index, saw a more significant decrease of 6.68%, breaking through previous uptrend lines.
Among the heavily weighted components of the Nasdaq 100, Apple and Meta Platforms closed the day with gains, while Amazon and Microsoft experienced losses. The index continues to trade above its 50-week and 200-week moving averages, with potential support levels identified if a larger sell-off occurs. Technical analysts are monitoring the April 2024 low near 17000 as a point of interest, with the 50-week moving average approaching that level. Further support could be found near the October 2023 low of approximately 14000, where buyers have previously stepped in.
On the daily price chart of the Nasdaq 100, gaps-up in June serve as potential price targets for active traders, with a third gap-up in early May also identified. The recent selling volume on Friday was notable, and the relative strength index (RSI) has exited the overbought range. The hourly price chart shows a closer look at the June gaps-up, with the price dropping below the 50-hour moving average and potentially signaling a downward trend. The RSI has reached the oversold range on the hourly chart.
The daily price chart for NVIDIA reveals three consecutive red candlesticks, a rare occurrence for the stock. Unfilled gaps-up in May and February are highlighted, serving as potential targets for active traders or computer algorithms. The red-dashed line at 75 indicates a level where significant buying support was seen in April. While this information is not intended as investment advice, it provides educational insights into market trends and potential trading strategies. For more in-depth analysis and commentary, readers can visit johnnavin.substack.com.
