Technical Analysis – US 100 index extends losses within bear market

The US 100 cash index (Nasdaq) came under renewed pressure in recent sessions, sinking to a fresh one-year low. Sellers are firmly in control with a series of lower highs and lower lows forming on the daily chart, the moving averages turning lower, and the price testing the lower Bollinger band.

Short-term oscillators reflect the sharp selloff, with the RSI turning lower to approach its 30 zone while the MACD has crossed beneath its red trigger line.

In case the bear market continues, the 12,200 zone could be the next source of support for the index. A deeper slide would turn the spotlight towards 11,600, a region that acted both as support and resistance back in late 2020 and also roughly coincides with the 50% Fibonacci retracement level of the March 2020 - November 2021 rally.

Should the bulls retake the wheel, the initial obstacle to any recovery rallies could be the 12,700 level. If that is overcome, the next barrier would be the round figure of 13,000 that is nearby. Even higher, the recent local highs around 13,500 would attract attention.

All told, the index is down 25% from its record highs. The technical picture continues to favor the downside and a break below 12,200 could re-energize the bears.

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