NASDAQ could be primed for shorts

The tech sector in the US has been one to watch over the past few weeks, with some drastic moves particularly to the downside being the highlight.

However we have seen a bit of a recovery which has made the price action look particularly interesting.

Traders are now pointing out the head and shoulders pattern seen on the NASDAQ (quoted as US Tech 100 on IG's platform). The neckline comes in around the April low of 3413. While this is still 5% away from being triggered, it’s important to flag it now as a closing break would subsequently target a move to 3100 (on this pattern).

Following the recent strength in US markets, some traders are now talking about a pullback being on the cards. It’s hard to short an index like the S&P as it remains in a firm uptrend. As a result, for traders eyeing shorts I actually feel the NASDAQ will be the one to watch.

US Tech 100
US Tech 100

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