In late January I was looking towards ~13610 for the Nasdaq 100 based on my detailed Elliott Wave Principle (EWP) count and technical analyses. From that level, I expected a 400-700p downside move with an ideal target zone of 13120-12825 before the index would move higher again to 13810-14125.
Fast forward, and the NDX had stalled at 13564. I was off by 46p (0.34%...) as it dropped to 12845 over the subsequent week. Now, it is trading at new all-time highs.
Thus, the projected path and price targets were reached to the T. The EWP and technical analysis were, once again, right on the money. With the current rally and shorter-than-expected correction, I have adapted the EWP count for the NDX count.
Figure 1: NDX100 daily candlestick chart with EWP count and technical indicators.
This adjusted EWP count fits better with the Fibonacci-extensions: green wave-3 almost precisely to the 161.80% extension, followed by green wave-4 practically to the 100.00% extension. Picture perfect so far. If this text-book pattern continues, I expect wave-5 (of red wave-iii) to reach the 200.00% extension as the 5th wave is often equal in length to the 1st wave. But 5th waves can also be shorter. Thus, the red target zone of around 13810-14125 should be the next topping area before we see a multi-week correction into the blue target box: red intermediate wave-iv. From there, another 5th wave, red intermediate-v, should carry the index to new ATHs and complete the rally that started in March 2020.
For now, the index is in what I call a “100% bull market,” as the index is above its rising 10-day Simple Moving Average (SMA), 20-day SMA, 50-day SMA and 200-day SMA. Besides, all these SMAs are rising, and all are bullishly stacked: price>10d>20d>50d>200d. Lastly, all technical indicators are on a buy.
Bottom Line: As long as the index can stay and close above yesterday’s low, which is about the same as Wednesday’s and Tuesday’s low and, thus, important support, I continue to expect higher prices over the next few days. A break and close below that level, from current levels, strongly suggests I may need to revise my EWP back to, indeed, the larger-degree (red) wave-iv, forming what is called a flat correction (see here). Then, we should see a retest of the 12830s level once again before moving higher to the low-14000s.