The Nasdaq Composite: Where Is It Heading?

08/11/00 02:43:09 PM

by Jayanthi Gopalakrishnan

The Nasdaq composite has been trading sideways ever since its sharp drop in April. A question dwelling on most minds is "When is the Nasdaq going to resume its upward trend?"

Security: $COMPQ
Position: N/A

It is difficult to identify clear-cut support and resistance levels on the Nasdaq composite at this point. After struggling with it for a while I was able to see the support and resistance levels using Gann lines. On the chart below I applied Gann lines from a prominent top on 3/10/00 to prominent bottom on 5/25/00. The lines you see on the chart are the support and resistance levels. At present, the Nasdaq composite is hovering between lines 3 and 4. If prices fall below line 3 for more than two consecutive days they are likely to fall to line 2. If they penetrate above line 4 they are likely to go as far as line 5.

I wouldn't be surprised to see the Nasdaq continue moving between lines 3 and 4 for some time. However, to avoid being caught by any surprises, I am presently using these Gann lines to monitor Nasdaq activity.

Gann lines show various support and resistance levels. Here you see them being applied to the Nasdaq composite.

Graphic provided by: Tradecast Securities, Inc..

Jayanthi Gopalakrishnan

Title:	Editor
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	Seattle, WA 98116
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E-mail address:	Jayanthi@traders.com
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