Technical Analysis: Nasdaq Hits Oversold Levels

On the daily chart, the Nasdaq (first chart below) is very oversold – ADX and RSI in particular are at very oversold levels. When a bounce comes, it could be a strong one. What happens after that will have much to do with how quickly bullish sentiment returns. The Nasdaq is slipping below 1776 support; below that, 1750 and 1737 come into play. The index has fallen so fast lately that it may not have much resistance when it first turns. Resistance levels to watch are 1787-1792, 1805, 1821 and 1829. The S&P (second chart) has strong support in the 1050-1060 range. Resistance is 1070 and 1075-1079. The Dow (third chart) has strong support in the 9650-9750 range, and 9500-9600 are also strong supports. First support is 9793, and resistance is 9852-9859, 9914 and 9990-10,008.

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