Nasdaq Technical Analysis: Sellers Remain in Control

In a recent analysis by Greg Michalowski, the Nasdaq index has shown significant bearish momentum, particularly over the past few trading sessions. The index faced resistance at the 200-hour moving average and a downward-sloping trendline, which has defined the upper boundary of its trading channel since February 5. This resistance led to a decline in the index, which closed just above the 100-hour moving average at 22,697.33, indicating that buyers were only marginally in control.

Market Dynamics

On the following trading day, the market experienced a sharp gap down, driven by rising oil prices and escalating geopolitical tensions in the Middle East, which negatively impacted risk sentiment. As a result, the Nasdaq index fell approximately 400 points, or about -1.76%.

Key Technical Levels

Traders are now focusing on several key support levels as potential downside targets:

• First support at the February 17 low of 22,256.76.
• Next, the March 2 swing level at 22,125.
• Followed by the March 9 low at 22,061.
• A break below these levels could lead to a test of the lower boundary of the trading channel, currently near 21,968.
• For broader context, the November 21 low of 21,898 is another critical reference point if bearish momentum continues.

Long-Term Outlook

From a longer-term perspective, the 38.2% retracement level of the upward move from the 2025 low is at 20,491.86, which would represent a decline of approximately 14.5% from the 2026 high.

Fundamental Pressures

Fundamentally, the closure of the Strait of Hormuz has contributed to rising oil prices, further pressuring equity markets. Additionally, interest rates are climbing, with the 10-year Treasury yield nearing 4.25%, which is pushing mortgage rates higher and creating additional headwinds for risk assets.

Political Context

Politically, the current administration is likely concerned about rising energy costs and falling stock prices, as these issues could become significant topics leading up to the November elections. The national average gasoline price has increased from around $3.12 per gallon at the end of the Biden administration to approximately $3.60 currently, which could complicate the administration's economic messaging.

Overall, the combination of technical analysis, fundamental pressures, and political context suggests a challenging environment for the Nasdaq index in the near term.