The chart shows the NASDAQ Composite Index (COMP) on May 19, 2025, closing at 19,215.46, up 4.36% for the day, with a 1-year view. The index has been volatile over the past year, peaking around 20,204.58 and dipping to 14,784.03, with recent upward momentum after a low near 16,000 in early April 2025.
Analysis:
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Trend and Momentum: The index is in a short-term uptrend since early April, breaking past the 18,937.42 resistance (previous close). The sharp 4.36% daily gain suggests strong bullish momentum, but it’s near the upper end of its recent range, close to the 52-week high of 20,204.58.
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Key Levels:
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Upside: The next key level to watch for a potential breakout is the 52-week high at 20,204.58. A sustained move above this could signal further gains, potentially targeting 20,500 or higher, depending on broader market conditions.
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Downside: Support lies around 18,937.42 (previous close), with a stronger support zone near 18,000, where the index found a base in March 2025. A drop below 18,937.42 could signal a pullback, and a break below 18,000 might lead to a deeper correction toward 17,000.
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Volatility and Risk: The large daily move (4.36%) indicates heightened volatility. The index is approaching overbought territory near its 52-week high, which could lead to a short-term pullback if momentum fades.
Tradable Position:
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Bullish Trade: If you’re looking to go long, wait for a breakout above 20,204.58 with confirmation (e.g., strong volume or a daily close above). Entry could be on a pullback to 19,500 with a stop-loss below 19,000, targeting 20,500 or higher.
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Bearish Trade: For a short position, watch for a rejection at 20,204.58 or a drop below 18,937.42. Entry could be on a break below 18,937.42, with a stop-loss above 19,215.46, targeting 18,000 or lower.
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Neutral/Safer Approach: Given the volatility, you might wait for a retest of support (around 19,000) or a breakout above 20,204.58 before entering. The current price is at a precarious spot near resistance, so entering now carries higher risk without confirmation.
Key Levels:
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To Go Up: Break and hold above 20,204.58.
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To Drop: Break below 18,937.42, with a stronger bearish signal under 18,000.
Keep an eye on broader market factors like the recent Conference Board Leading Economic Index (LEI) decline we discussed, which signals potential economic weakness and any news impacting tech-heavy NASDAQ stocks, as they could influence the index’s direction.
Disclaimer: Not financial advice