Today's bullish market action has bought the markets close to the top of the multi-month trading range which happens to be the 2325 level for Nasdaq. No doubt, this makes it an important level and the one to watch out for on Nasdaq this week. Below is a daily chart of Nasdaq.
However, to truly appreciate the importance of this level, one has to have a look at the weekly chart of Nasdaq and go way back to 2005.
As we can see above, this level:
(1) acted as resistance at end of 2005 causing a 300 point pullback
(2) provided support back in 2007
(3) Bulls unsuccessfully tried to take over this level close to end of 2008, leading to the sharp drop
(4) Acted as resistance in 2009
(5) And of course, is the top of the trading range we find ourselves currently in.
It goes without saying keep an eye on this level this in the week ahead!
In case you missed it, here is my strategy on playing overbought markets and a review of today's action.
Take care and good luck!