NASDAQ pauses after heavy losses, near term outlook remains negative below 200DMA

Nasdaq edged higher on Friday morning, consolidating heavy losses of the previous day, after tech-led index collapsed on Thursday, losing over 7% of its value in one day.

Shockwaves after US Democrats regained full control of the Congress, hit tech sector the most, boosting existing uncertainty over signals about scrutinizing fast AI infrastructure expansion and particularly on data centre construction, sparking sharp sell-off.

The Index is on track ending the fourth consecutive week in red, with reversal signals developing after pullback from new record high of Oct 6, has so far registered loss of around 14% (loss of minimum 10% signals correction).

Thursday’s sharp acceleration lower surged through 200DMA (28064) and important Fibo levels at 28110 and 27094 (38.2% and 50% of 22791/31397 respectively) generating strong bearish signals, along with massive bearish daily candle that weighs on near-term action.

Oversold conditions on daily prompted a partial profit-taking, but increased downside risk is expected to persist while fundamentals remain favorable and while the price holds below broken 200DMA.

Also, weekly close below 27080 (July 27 low / near 50% retracement) would add to negative signals and keep bears in play for extension towards targets at 26230 / 26080 (Jan 29 high / Fibo 61.8%) and 24822 (Fibo 76.4%).

Res: 27515; 28064; 28467; 28863
Sup: 26273; 26230; 26080; 25450