Was it a micro flash, or was it something else? Market participants disagree over the cause of the massive losses seen on the Nasdaq 100 index on Tuesday. However, they can agree that the crash is a massive one, representing the most significant daily drop in the Nasdaq 100 since 18 March.
Pushing the slump is the selloff in the major tech stocks, with the FAANG shares all losing ground on the day. Amazon has been hit particularly hard, losing nearly 6% in three days. Tesla also had a taste of the downside on a red Tuesday. As of the time of writing, the Nasdaq 100 index was trading 2.8% lower.
Following the completion of the W harmonic pattern on the daily chart at the 14078 price mark (all-time high), the Nasdaq 100 has fallen steeply off the cliff and looks set for a 4th straight day of losses. The active daily candle has violated the 13559 support and is gradually aiming for a touch off the 13344 support level. Below this area, 13135 and 12973 constitute additional targets to the south.
On the flip side, restoration of the uptrend depends on a bounce off any of the support levels mentioned above, ultimately dismantling the resistance barriers at 13800, 13904, and 14078 en route to forming new highs. The 14435 price level at the 141.4% Fibonacci extension level is a potential new record target for bulls.
