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TECHNICAL ANALYSIS


Hard Hat Zone

08/13/09 08:41:37 AM
by Austin Passamonte

Here's a long-term chart view of price measurement per the NASDAQ 100 index futures.

Security:   NQ
Position:   N/A

The summer 2009 stock market rally has been led all the way by technology stocks. NASDAQ 100 is on an upward tear, with no visible end in sight.

FIGURE 1: NQ, DAILY
Graphic provided by: TradeStation.
 
Below the current peak highs in NQ, we see an open gap from the July 22nd session close around the 1556 level (Figure 1). Slightly below, there is a congestion channel that began in the drop from September-October 2008 and contained price movement on the way back up in mid-2009. That channel will probably be retested sooner or later as confirmed solid support.

FIGURE 2: NQ, WEEKLY
Graphic provided by: TradeStation.
 
Looking at the wider view on the weekly NQ chart, where a jumbled layer of overhead congestion awaits an inevitable test of resistance (Figure 2). NQ 1650- 1670 is an open gap from last year and a Fibonacci projection of 233% from the 1-2-3 bottom formation is visible.

At the very least, we can expect NQ price action to pause or stall in this zone before the next resolution higher. It is entirely possible that will mark a swing-high top into a back and fill retracement to the price magnets depicted. There are no certainties in trading: just scenarios. Heavy congestion lies just above the resting NQ price action. A pivotal zone and key inflection area could determine the balance of 2009 and possibly beyond.



Austin Passamonte

Austin is a private trader who trades emini stock index futures intraday. He currently trades various futures markets from home in addition to managing a trader's educational forum

Title: Individual Trader
Company: CoiledMarkets.com
Address: PO Box 633
Naples, NY 14512
Website: coiledmarkets.com/blog
E-mail address: austinp44@yahoo.com

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Date: 08/13/09Rank: 4Comment: 
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