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Nov 17, 2021, 10:03 AM GMT

Nasdaq Probing the Psychological Resistance at 16000.00 for a Second Time

The price action of the Nasdaq composite index is currently testing the psychologically significant resistance level at 16000.00, which is also the all-time highest resistance level, for a second time over the last several days. Due to the significance of this threshold as a major turning point, there is a very high probability that a second dropdown would emerge from it in the very near future.

Nevertheless, bears looking to implement contrarian trading strategies on the current setup should be careful because the underlying rally, driven by heightened investors' enthusiasm, continues to be very much active. That is so because of the robust economic data that has been posited recently.

The latest examples of this are the better-than-expected consumption numbers for October and the very strong employment growth that was recorded over the same period. Those represent very significant indications for the likely continuation of the rally further up north in the medium term. This, however, does not preclude the possibility of intermittent corrections occurring in the short term, particularly since the price action is concentrated around such a psychologically significant threshold.

Profit & Loss
Short Term Long Term Net % Gains
+ - + -
0 71 BPS Pending Pending
Short Term
+ -
0 71 BPS
Long Term
+ -
Pending Pending
Net % Gains

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