« Chart in Focus: Rising Wedge Reversal on NDX »

'Chart in Focus' is a new feature from TheMarketMessenger.com. We'll provide details on this new feature in the coming days; it's quite self explanatory actually. Now let's take a look at the first entrant into the 'Chart in Focus' segment...

This a chart of the Nasdaq-100 index zoomed-in to focus on what looks like a potential rising wedge (reversal variant), at the end of a spectacular minor trend bull run. The validity of the potential - and we say potential because prices actually have to close below the lower wedge line in order to complete the pattern (and it is presently early in the day) - is given a boost by the falling trend in volume, which is something that is typical of wedge formations.

Assuming that the formation is legitimate, the minimum target from the same is for a drop to the level of the beginning of the wedge (1550-1560). However, given the preponderance of other sell signals on charts, many of which provide the opportunity for much large declines (we've spoken about the same in the commentary pieces provided in the Members Area), we're placing near-term (2-6 week) targets at 1515 and 1400.