The medium-term risk-reward is still to the upside for the Nasdaq Future (NQ1) while the uptrend is intact, however short-term signals suggest a correction may be near, according to Andy Dodd, Head of Technical Research at Louis Capital Markets.
The future has rallied off its trend line over the last couple of weeks, taking it to new all-time highs, and Dodd says the trend is still intact. However, the hanging man candlestick of 13 February does suggest a pause to the rally especially as it was followed by a Demark sell signal on 14 February (see Chart).
These signals suggest a re-test of support levels may occur before a continuation of the rally. Dodd says the closest support levels lie at 9287.25, 9229 and 9170, whereas resistance can be found from the Fibonacci extension at 9644.