Nasdaq indices bounce off support, face moving average test

Both the Nasdaq Composite and Nasdaq 100 attracted buying interest near key support levels during the previous session, leading to a bounce. For the bulls, this is encouraging. However, the immediate task now is to rise above and hold above the 100-hour and 200-hour moving averages.

In early trade, the indices are situated between those two moving averages. This places the action in a neutral zone for the short term. While buyers halted the selloff, they have not assumed complete command.

Nasdaq 100: buyers protect the swing zone

Yesterday, after the FOMC decision, the Nasdaq 100 declined, slipping below its important 100-day moving average at 29,230. However, the drop stalled near the swing zone between 28,953.06 and 28,822.67, a region that has drawn buyers on multiple occasions since June.

The recovery into the close brought the index nearly back to flat. This session, a strongly higher opening lifted the index above its next key level, the 100-hour moving average at 29,310.79, with the price around 29,349.87 at the time of writing. The subsequent target is the 200-hour moving average at 29,431.12.

• Rise above and hold above the 200-hour moving average at 29,431.12 — a more bullish signal.
• Clearing resistance at 29,496.93 would strengthen the bullish outlook.
• A sustained move higher would boost the bullish case and bring 29,669.40 into focus.

For sellers, a fall back below the 100-hour moving average would undermine the bounce. A break of the 100-day MA at 29,230 would again increase bearish sentiment. Below that, a break of the 28,9953 to 28,822.67 zone would hand sellers greater control, with the 38.2% retracement at 28,545.95 as the next downside objective.

Nasdaq Composite: sellers missed their chance

Yesterday, the Nasdaq Composite dropped below its 100-day moving average at 26,026, testing the lower boundary of a swing zone from 25,978.42 to 25,910.82. Buyers intervened, and the index recovered toward the close. The bounce kept the buyers' prospects alive, though the index closed near the 100-day MA.

What is clear is that sellers had their opportunity but failed to capitalize.

Today's sharp opening bounce brought the index back to its 100-hour moving average at 26,294.54, with the price around 26,297.06. The 200-hour moving average at 26,352.41 lies just above and represents the next challenge.

If buyers can rise above and hold above both hourly moving averages, they would gain more control. That would redirect attention to the resistance zone from 26,676.31 to 26,856.24.

If the price fails at the moving averages and reverses lower, the 61.8% retracement at 26,123.33 becomes the initial downside target. Below that, the 100-day MA at 26,026 and the swing area from 25,978.42 to 25,910.82 will serve as key support levels. A break below that zone would pave the way toward the 38.2% retracement at 25,474.91.

Trading lesson: a break is only the beginning

Breaking through a technical level matters, but holding that level is what confirms whether buyers or sellers maintain control.

Here, the 100-hour and 200-hour moving averages offer that roadmap. Above both averages, the bias turns more bullish. Below them, the bounce stays vulnerable.

The lesson is straightforward: break, hold, confirm. Buyers protected support but must still demonstrate they can sustain prices above the moving averages.

The roadmap

• Bullish trigger: rise above and hold above both hourly moving averages.
• Bearish trigger: slip back below the moving averages and then break the defended swing support.
• Neutral zone: between the 100-hour and 200-hour moving averages.