It is possible that the recent short-term pullback ended today. If not, strong support is near, and the mid-term uptrend should resume by the end of the week. Tonight we have charts of the NASDAQ 100, SMH, Russell 2000, and the NASDAQ Composite.

The first two charts are of the NASDAQ 100. The first chart shows a nine month period and you can see how the index is currently sitting at the support we have mentioned for the last few weeks and is beginning to form a symmetrical triangle formation (green lines). The support is not only from the breakout from the recent ascending triangle formation (blue lines), but is also from the tops of both the left and right shoulders of the once possible head and shoulder formation. As long as the NASDAQ 100 is able to stay above the uptrend line from the symmetrical triangle that is forming (green lines), we can assume that the NASDAQ 100's next stop is resistance from the downtrend line of the symmetrical triangle. If the index does push to this line, we can only assume that a push above 2006 highs will soon follow. Alternatively, if the index breaks below the green uptrend line, a fall to the 1675 area is expected. Bollinger Band Width is continuing to decrease, suggesting that more sideways action will continue in the coming days.

The second chart shows the NASDAQ 100 from its recent upmove in March. We have added Fibonacci retracements to show how the recent pullback almost fell to the 61.8% retracement. The horizontal support line shows today's bottom, as well as the bottom from April 11th, and suggests the possibility of a new trend starting. As long as the index can stay above today's low, we can assume that the pullback is over and that the 1745-1750 area is the next target, before a push to new 2006 highs.

The next chart is of SMH. SMH found support at its 50 day moving average today. It is unlikely that SMH will fall below this indicator anytime soon. We mentioned in a previous commentary that when SMH broke 37, a push to 39 was the next move. It looks like SMH only got to the 38.80 area, but don't despair, this next upmove should easily break the 38.80 area and push to the 40.00-40.50 area.

The next chart shows the Russell 2000. You can see how the Russell 2000 bounced off of its lower uptrend line again last week. If the index does continue to fall from here, strong support is in the 755 area. It is unlikely that the index will fall this far, but if the micro-term bottom did not form today, a fall to that area is certainly possible.

Take Care,

Stephen Brown
Founder of Nasdaq Wizard, LLC