By Dan Eduard – The Nasdaq 100 has been seeing a steady upward trend over the last several weeks as a series of economic indicators have pushed up CFD’s along with other riskier assets. As will be shown through a number of technical indicators, the Nasdaq has been trading in overbought territory for some time and is overdue for a downward correction.
We will be looking at the 8-hour chart for the Nasdaq 100, provided by Forexyard. The technical indicators being used are the Stochastic Slow, Relative Strength Index (RSI) and Williams Percent Range.
1. The Stochastic Slow shows that a bearish cross is close to forming right around the 80 level. Typically, a cross formed above the 80 line indicates a downward correction is likely to take place.
2. The Relative Strength Index is trading well above the upper resistance line, and has been for some time. This indicates that the CFD has been overbought for an extended period, and is likely to drop in the very near future.
3. Finally, the Williams Percent Range is currently right around the -5 level. Anything above the -20 mark is generally considered to be in the overbought region, meaning the Nasdaq is likely to experience heavy downward pressure.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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