Nasdaq Technical Analysis, think opposite of what most are thinking (they are bullish)

Nasdaq Technical Analysis: Profit-Taking Zone Ahead?

The Nasdaq 100 futures (NQ) have been riding a strong bullish trend, currently trading around 22,732.50, marking new highs amid widespread optimism over anticipated interest rate cuts.

However, contrarian traders should take note: the current technical setup on the one-hour chart suggests it might be time to consider the opposite stance, as most traders remain strongly bullish.

Technical Signals for Caution, see the video

• Channel Resistance and Internals: Price is nearing a critical area at the top of a long-term rising channel. Historically, this zone has prompted profit-taking, leading to possible reversals or retracements. The chart currently shows two clear touch points and an internal channel with a small breakout or “shoot-off,” hinting at potential exhaustion of bullish momentum.

• Potential Healthy Retracement: Technical analysis indicates the possibility of a retracement developing. Such pullbacks could be a healthy market reaction, potentially correcting towards lower channel boundaries.

Actionable Insight for Traders:

Traders holding bullish positions, including in stock portfolios, might consider scaling back or taking partial profits as the index reaches this key resistance zone. Watch closely for bearish signals or a rejection near the recent highs (around 22,760).

Next Steps for Nasdaq traders:

• Confirm bearish indications before initiating short positions.

• Observe closely how price action develops around these critical channel boundaries.

• Even if you do not trade but follow the market for the sake of your stock portfolio, this may be a good spot to consider dwindling down, if that suits your strategy

Stay alert—though sentiment remains predominantly bullish, prudent management of existing positions is advised to safeguard profits at a local highs, possbly, and even potentially an interesting bearish pivot point. For example, selling 10%-20% of your portfolio, into cash, can be legit (but up to you to decide, we just try to provide some opinions and decision support).

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