The tech wreck has been fast and furious. And considering that the stock market correction is still relatively new, we really don’t know if it will end soon or carry on for weeks or months.
Today’s chart is linear and takes a long-term monthly view. As you can see, the NASDAQ Composite Index registered a bearish monthly reversal at the top of the channel at (1).
And in the first 21 days of the year, this broad index of technology stocks has wiped out the prior seven months of gains!
This shows up in that gigantic engulfing price candle at (2). The selling has been fast and furious, so a bounce could come anytime. But this ominous candle should at least be a reason to proceed with caution in the weeks ahead.
The long-term trend is up. But stocks can still face severe corrections even in an up-trend. With this in mind, it is always good to mind bearish reversal patterns. Stay tuned.