On Sep 4, 2020, the first day after massive fall, Nasdaq touched the lows of 11,146 (5.3% low from the previous day closing), the low price however faced rejection and market closed at 11,622.10, down by 1.27%. The close was at the support line connecting the pre-COVID fall highs on Feb 19 with the lows of Aug 21 (Shown as B line in charts). Traders and analysts were eagerly waiting to see the next move after a long weekend due to the Labour Day holiday. This was because even after heavy fall on Sep 3, upward channel formed since March 23 was still seen intact and there was lower price rejection observed immediately after the day of fall, making revival hopes alive.
On Sep 8, Nasdaq broke the above support line at opening itself, it also broke the next most crucial support line of upward channel formed since March 23. (shown as A - green line). This closing can be seen even more negative as there was clear price rejection at upper level, leaving the only solace that it closed just above DMA50 levels of 11,066.20, which now remains its immediate support point. The key challenge is re-entry in upward channel i.e to close above 11,366 (level for Sep 9). On downside around 10,850 is the next support level which is also the lows of Aug 2020 (shown as Line C), followed by 10,485 at line D.
Fibonacci level of 61.8% stands at 10,274 and 50% retracement level is at 9605 (line F) which has played support and resistance at multiple occasions in the past and is also crucial point of pre COVID fall.
- Rajesh Ramchandani
On Sep 8, Nasdaq broke the above support line at opening itself, it also broke the next most crucial support line of upward channel formed since March 23. (shown as A - green line). This closing can be seen even more negative as there was clear price rejection at upper level, leaving the only solace that it closed just above DMA50 levels of 11,066.20, which now remains its immediate support point. The key challenge is re-entry in upward channel i.e to close above 11,366 (level for Sep 9). On downside around 10,850 is the next support level which is also the lows of Aug 2020 (shown as Line C), followed by 10,485 at line D.
Fibonacci level of 61.8% stands at 10,274 and 50% retracement level is at 9605 (line F) which has played support and resistance at multiple occasions in the past and is also crucial point of pre COVID fall.
- Rajesh Ramchandani