On Wednesday NQ opened with a large gap-up, and then rallied right away up to 7070 resistance before heavy selling at resistance pushed NQ back down where it then spend the rest of the day trading sideways. Wednesday's rally was the second attempt to break above key resistance, the 200-day moving average, now located at 7100, and the second failure.
Going foreword, 7100 price level, the 200-day moving average on the daily chart, will remain a key resistance level, and failure to break above that level soon could attract heavy selling which can tank NQ back down. However, as long any decline does not break below key support the rally should resume.
On the intraday 5-minute timeframe, key price level to watch for on Thursday will be 7000, the 200-ma on the 5-min chart.
-- If NQ remains above 7000 on Thursday we could see another rally attempt to resistance, 7070-7100. Should NQ clearly break above 7100 we could see more short-covering.
-- Trading below 7000 could trigger some selling with downside target at 6900. However, there are numerous support levels that could easily stall the decline.
