Investors piled into shares of economically sensitive companies and pulled back from technology stocks Monday, leading to a divergence in major indexes.
Despite stellar earning reports delivered by AAPL, GOOGL, AMZN, FB and MSFT last week, the Nasdaq index has been struggling during the last several sessions. This is clearly a warning sign. The bearish hypothesis will be further strengthened if NQ drops below important short-term support at the 13700 level.
When we zoom out, we see that Nasdaq has potentially formed a failed break out attempt in April after NQ / NDX got rejected at the 14000 level multiple times during the last several weeks. Again, this bearish formation will be confirmed if NDX drops and closes below 13700 during the next several sessions.