Figure 3: NASDAQ on a daily chart
The moving averages of EMA 50 and SMA 100 formed a bullish constellation of the Golden cross last week (a situation where EMA 50 is above SMA 100 on a daily chart). The index is moving in a rising wedge and the price has closed a bearish 123 gap, which may become a current resistance. At the same time, however, the candle on May 18, created a bullish 123 gap, which confirms the current strong bullish sentiment.
Although the economic fundamentals are not favorable, there are not stronger signs of a reversal in the movement of this index at the moment. The first signal of a trend reversal might be the moment when the price would break through the lower trend line of the rising wedge.
is the upper part of the gap in the band around the value of 9,500. Another resistance is at the all-time high in the band 9,730 – 9,760.
is at the level of 9,160 - 9,280, which is the last 123 gap.
The SP 500
Also in this index, a bullish 123 gap was created on May 18, 2020, but the price continues to be below the moving averages SMA 100 and SMA 200, which are in a bearish constellation and index is continuing to move more in a sideway. The index has reached the level of horizontal resistance were at the same time there is a confluence with resistance on SMA 100. The Purple Extreme indicator shows that the price is overbought.