Stocks Analysis by Declan Fallon covering: NASDAQ Composite, Philadelphia Semiconductor Index. Read Declan Fallon's latest article on Investing.com
While indices are pushing towards new all-time highs there's a case where a larger decline could emerge despite recent benign losses. The first thing to look at is breadth metrics.Stocks Above the 50-day MA has moved back to trendline support, but supporting technicals show 'sell' triggers in the MACD, CCI, and +DI/-DI. Further losses where would trigger a breakdown.Bullish Percents peaked at 58% and then reversed with 'sell' triggers in the MACD and CCI.
The CCI is also struggling at its midline with the relationship between the Summation Index and Bullish Percents on a 'sell' trigger. Technicals remain bullish. Stochastics in particular don't suggest any large decline is in the offing, but something similar to the summer of 2023 is a possibility.. Recent action points to a convergence similar to a rising bearish wedge. Support for this wedge is running close to its 200-day MA, another reason to be watchful.
Watch how the Nasdaq and supporting metrics play out over the coming weeks. I'm not expecting any major losses, but we may have to wait a little longer before the Nasdaq (andRisk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.
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