NDX breaks below 50-day moving average for the first time since October 6th

Nasdaq 100 Index (NDX) Technical Analysis Report for Oct 26, 2020 | by Techniquant Editorial Team


NDX breaks below 50-day moving average for the first time since October 6th
NDX closes below its opening price unable to hold early session gains
NDX runs into sellers again around 11708.08
NDX breaks below Friday's low


NDX finished Monday at 11504.52 losing $188.05 (-1.61%). Trading $123.91 higher after the open, Nasdaq 100 was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Friday's low at 11569.09, the stock index confirmed its breakout through the previous session low after trading up to $208.36 below it intraday.

Daily Candlestick Chart (NDX as at Oct 26, 2020):

Daily technical analysis candlestick chart for Nasdaq 100 Index (NDX) as at Oct 26, 2020

Monday's trading range has been $347.35 (3.0%), that's far above the last trading month's daily average range of $196.36. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NDX.

In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on October 6th, NDX actually gained 1.88% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.

Nasdaq closed below the 50-day moving average at 11530.06 for the first time since October 6th. After having been unable to move above 11693.01 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 11708.08.

While the index is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.

As prices are trading close to October's low at 11225.17, downside momentum could speed up should NDX mark new lows for the month.

Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Nasdaq 100. Out of 335 times, NDX closed higher 59.10% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 67.76% with an average market move of 1.16%.

With five out of the other five Major World Indices closing lower today, the ones that stand out on the negative side are DAX losing -3.71% and DJIA closing -2.29% lower. None of the markets managed to end the day in the green. Read more

Market Conditions for NDX as at Oct 26, 2020

Loading Market Conditions for NDX (Nasdaq 100 Index)...
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