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01.06.2022 05:37 PM
Trading Signal for Nasdaq-100 (#NDX) on June 1-2, 2022: sell below 12,786 points (200 EMA - overbought)

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Early in the American session, the Nasdaq-100 (#NDX) is trading at around 12,786 right at the zone 200 EMA with a strong overbought signal.

On May 30, the Nasdaq-100 attempted to consolidate above the 200 EMA reaching a high of 12,881. However, it quickly plunged lower, making a technical correction to 4/8 Murray around 12,500.

Today in the American market session, the NDX is trying again to consolidate above this moving average of 200. In case of achieving it, we could expect an advance of the upward movement and the index could reach 5/8 Murray at 13,125.

Conversely, if the index fails to consolidate and close below 12,786 on the 4-hour chart, we are likely to see a technical correction and the index could reach the 21 SMA around 12,600. A break of this moving average could accelerate the drop towards 4/8 Murray at 12,500 which coincides with the bullish channel that was broken.

If downside pressure prevails, we should expect a close below the uptrend channel and below the 4/8 Murray on the 4-hour chart. If our outlook comes into being, the NDX could reach the area of 12,107, a level that coincides with the bottom of the uptrend channel, and could even fall to 3/8 Murray at 11,875.

Our trading plan for the next few hours is to sell below the 200 EMA located at 12,786 with targets at 12,600 and 12,500 (4/8). Below 12,500 if bearish pressure prevails, we can continue selling with targets at 12,250 and 12,107.

On May 30, the eagle indicator gave a signal of the extremely overbought market, which is likely to lead to an imminent technical correction in the next few hours. This signal from the eagle indicator supports our bearish strategy. Therefore, it is a good trading idea to sell the Nasdaq-100.

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