Was yesterday’s rally in the Nasdaq just a retest of the neckline of the head and shoulders or something more significant?
After falling out of the “Go” trend on a break below the neckline, the QQQ rallied sharply yesterday.
We saw bearish divergence as the GoNoGo Oscillator made a lower high as price peaked. Typical of this pattern when combined with the GoNoGo chart, we saw the GoNoGo Trend indicator fail to maintain “Go” colors during the right shoulder, with the “NoGo” happening as price broke through the neckline. We also saw heavy volume during the right side of the pattern, as depicted by the dark blue of the GoNoGo oscillator. Now we will look to the oscillator, and see if it gets rejected by the zero line as it approaches from below. If it does, it is likely price rolls over and moves lower. If it can get back into positive territory, a return to the “Go” trend is possible.
By
Alex Cole
