Nasdaq – Monthly Analysis
Nasdaq just delivered its strongest monthly rally since 2020, adding more than 15% and validating the April 9 bullish call in dramatic fashion.
Now comes the harder question: was April the start of a much larger advance, or did the index just spend a major part of its short-term fuel?
In this monthly analysis, we examine Nasdaq through candles, trend structure, momentum, and Elliott Waves to determine whether the rally has room to extend, or whether the next move is a pause, pullback, or a deeper reset before the next major decision.
CANDLES
Nasdaq closed the monthly and smaller frames with bullish reversal and continuation candles. All trends remain bullish, supported by a solid technical backdrop.
The only concern is the continued overbought condition on the frames below the weekly, along with some divergence signals. However, while this is worth monitoring, there is no strong bearish signal yet.
Overall, Nasdaq remains bullish until signaled otherwise. The risk of a pullback is present, but still needs confirmation.
Statistics – 8/20-Week EMA Cross
Nasdaq has advanced about 11% since the statistical call on April 9, and all estimates remain intact.
Tactically, Nasdaq needs to cool off and normalize short-term technicals through a horizontal or slightly downward move.
Elliott Waves
Mid Term
On the mid-term chart, I am tracking two counts as the most probable: the green and the red. The key moment will be the next pullback.
If NQ holds above the March low and starts another rally, the current wave can be treated as wave 1 of (3) in red. This count would also closely resemble the July–October 2023 correction and the subsequent rally, as shown in the inset.
A break below the March low would open the path to a much deeper correction, which would be treated as wave (2) in green.
Possible Ending Diagonal
A few days ago, I alerted that NQ has been struggling to form clean upward impulses since April 16. There have been multiple overlaps of significant waves, along with other signs of corrective structures developing upward. Together with technical support, these conditions point to a possible Ending Diagonal, either already completed or in its final stages. The cash index is also aligned with this view.
If this hypothesis materializes and we see a very sharp wave down early next week, NQ could easily drop 5–6%, or even more, from the recent ATH. The question then would be which path it follows on the mid-term chart, green or red.
SUMMARY
Nasdaq remains bullish until signaled otherwise. The 1-4-month and smaller frames closed with bullish reversal and continuation candles, while all trends remain bullish and technically supported. The index has advanced about 11% since the April 9 statistical call, and all estimates remain intact.
The main concern is short-term exhaustion. NQ remains overbought on the frames below the weekly, with some divergence signals developing. Tactically, the index needs to cool off and normalize through a horizontal or slightly downward move.
From an Elliott Wave perspective, the next pullback is the key. The mid-term green and red counts remain the most probable. If NQ holds above the March low and starts another rally, the current wave can be treated as wave 1 of (3) in red, similar to the July–October 2023 correction and subsequent rally. A break below the March low would open the path to a much deeper correction, likely wave (2) in green.
The immediate alert is the possible Ending Diagonal since April 16. NQ has struggled to form clean upward impulses, with multiple overlaps and corrective-looking waves. If the diagonal hypothesis materializes and a sharp wave down begins early next week, NQ could drop 5–6%, or even more, from the recent ATH. The key question afterward would be whether that decline supports the red or green path on the mid-term chart.
