-
The S&P 500 and Nasdaq 100 are below their 200-day moving average.
-
It is a key indicator for recognizing the direction of long -term market trends.
-
One technical analyst warns to a potential fall, with more winds in the next quarter.
The shares are in a dangerous zone that technical analysts are closely observed due to signs of further weakness.
S&P 500 and Nasdaq 100 are traded below the moving average of a 200-day, important technical indicator that helps identify a long-term trend direction.
When securities fall below this level, it sends a warning to traders that the previous increase in price could be on the verge of a turnaround and a decrease in the decline.
AND S & P 500 and Nasdaq 100 They traded below their 200-day moving average from the beginning of March, and perhaps more importantly, both tested the level again and failed to climb above it.
This trading behavior is accompanied by a key principle of technical analysis, which is that the old support level becomes a new resistance at the beginning of the fall.
Recent trade behavior strengthens the idea that the 200-day moving average now acts as a level of resistance to shares.
A recent sale could also mark the beginning of a new fall, which is defined as a series of lower peaks and lower downs.
This does not mean that the bull market is over. There were a lot of main fakes for merchants who were focused on the 200-day moving average, including in March 2023 and November 2023, when the index briefly traded below the indicators but quickly recovered.
But the longer the index trade below the key level, the more likely it is to be a new fall.
Katie Stockton, closely monitored the technical analyst at Wall Street, she told clients in a recent leg that she would expect that the pain in stocks would continue.
“Our middle birth indicators suggest that the correction will continue in the middle of April,” Stockton said, adding that recently trade behavior in Nasdaq suggests “challenging Q2”.
Read the original article about Business Insider
