The Nasdaq Composite Index is facing continued downward pressure, moving away from its 200-day moving average of 18,404. The index approaches the 38.2% Fibonacci retracement level at 17,284, a critical point for buyers aiming to maintain support.
Today, the index fell 3.52%, nearing its largest daily declines of 2024, which have been between -3.26% and -3.64%. The persistence of selling pressure could lead to increased momentum if the 38.2% level does not hold, with the next significant target being the 50% retracement at 16,382.
Potential For Recovery
For an upward recovery, the Nasdaq must reclaim the 200-day moving average at 18,404. A resistance zone between 17,832.70 and 18,086.83 has been pivotal since July 2024; a breakout here could boost buyer confidence. Presently, the Nasdaq is down 13.3% from its December high.
The decline of the Nasdaq Composite Index below its 200-day moving average suggests that market participants are reassessing risk exposure. With the 38.2% Fibonacci retracement level at 17,284 now in sight, traders are likely weighing whether this area can act as a stabilising force. A breach of this threshold would heighten the chance of further selling, pushing the index toward the next retracement level at 16,382. Given that recent daily declines have fallen within a narrow range, a move beyond this could indicate a growing urgency to reduce positions.
The extent of the recent downturn raises the question of whether short-term relief is possible. For any upward movement to gain traction, a sustained recovery above 18,404 would be necessary. The resistance zone between 17,832.70 and 18,086.83 has acted as a deciding factor multiple times since July, making it a level to watch. Should buyers push past this area, sentiment could improve enough to slow the downward move.
Market Sentiment And Outlook
Beyond technical levels, the broader environment remains a driving force. Confidence has already been tested by external pressures, and hesitation among buyers could make it harder to establish a strong recovery. Short sellers may stay aggressive if momentum continues to favour further declines. Meanwhile, those looking to re-enter long positions could wait for confirmation that selling pressure is easing before committing capital.
