Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Nasdaq 100 Forecast: Bearish Gartley Pattern Hints at Downward Pressure

Nasdaq 100 Forecast: Bearish Gartley Pattern Hints at Downward Pressure

Margaret Yang, CFA, Former Strategist

Share:

What's on this page

Nasdaq 100 index Technical Forecast: BEARISH

  • The Nasdaq 100 index has likely formed a bearish Gartley pattern - a classic harmonic configuration
  • The MACD indicator formed a bearish crossover and pierced below the neutral midpoint, pointing to mounting downward pressure
Elliot Wave for Advanced Users
Elliot Wave for Advanced Users
Recommended by Margaret Yang, CFA
Elliot Wave for Advanced Users
Get My Guide

Chart by TradingView

The Nasdaq 100 index has entered a consolidative mode since mid-April, falling more than 6% from its all-time high. The index formed a bearish Gartley pattern, as highlighted in the chart above, suggesting that a deeper pullback is likely.

The Gartley pattern is a classic harmonic chart pattern, based on Fibonacci numbers and ratios. A bearish one starts with a downtrend from point ‘X’ to point ‘A’ with a price reversal at point ‘A’. The ‘XA’ leg is followed by a bearish ‘AB=CD’ pattern.

Using Fibonacci ratios, the retracement between point ‘X’ and point ‘B’ should approximate 61.8%. The retracement between point ‘C’ and point ‘A’ should be close to 38.2% or 88.6%. Point ‘D’ is usually the 127.2% or 161.8% extension from point ‘B’. These Fibonacci levels do not need to be exact, but the closer they are, the more reliable the pattern tends to be. The bullish version of the Gartley pattern is simply the inverse of the bearish one.

In this scenario, the ‘D’ point is the all-time high and may be used as a reference for overturning the bearish implications of the setup. The ‘C’ point can be viewed as a reference for follow-through if the pattern plays out.

An immediate support level can be found at 12,900 – the 127.2% Fibonacci extension, breaking which may lead to further losses with an eye on 12,487 – the 100% Fibonacci extension. Prices pierced through the 50- and 100-day SMA lines decisively, suggesting that near-term trend has turned bearish.

The MACD indicator is trending lower beneath the neutral midpoint, suggesting that downward momentum is prevailing.

On the weekly basis, the bearish Gartley pattern may serve as a trend-reversing indicator if prices breach below the ‘C’ point. A negative MACD divergence is observed, suggesting that upward momentum is fading. The 200% Fibonacci extension (14,013) remains a key resistance in the medium term.

Nasdaq 100 Index – Weekly Chart

Chart by TradingView

Top Trading Lessons
Top Trading Lessons
Recommended by Margaret Yang, CFA
Top Trading Lessons
Get My Guide

--- Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES