The Nasdaq (NQ100) is testing its all-time high again. A move above it could trigger more buying, while a reversal could lead to a pullback.
There is room for price to rise before the next resistance at ET zone 8. However, yesterday’s bearish candle shows there is opposition near current levels.
Key Scenarios Ahead
One scenario is a bearish bounce at yesterday’s high, which could lead to a larger drop. Price may fall back to ET zone 7, where a bounce could then develop.
Another scenario is a break above yesterday’s high, which could allow one more push higher. After a new higher high, a pullback may occur before a later move towards ET zone 8.
On the four-hour chart, price used ET zone 8 as support after a corrective pattern. Price has now returned to the prior top, which is acting as a key level.
A break above the marked resistance could open a move towards ET zone 9. An ABC retracement could instead send price back to the 21 EMA area and the ET zone 8 level.
Momentum And Retracement Levels
The depth of any retracement depends on momentum. It may stabilise at the lower part of the 21 EMA zone, or continue lower if that area does not hold.
The Nasdaq is at a critical all-time high, forcing a decision in the coming weeks. Yesterday’s hesitation shows that while bullish momentum is strong, there is opposition at these levels. This sets up a classic breakout-or-reversal scenario for our trading strategies.
This tension is happening as we’ve just seen the April CPI data come in at a slightly cooler-than-expected 3.3%, which generally supports the case for a bullish breakout. Last week’s jobs report also showed a modest slowdown with 175,000 jobs added, giving the Federal Reserve more reason to pause, which is fuel for the Nasdaq. This fundamental backdrop suggests the green arrow scenario, a push to new highs, is very possible.
For derivative traders anticipating a breakout above the high, buying June call options or establishing bull call spreads offers a way to capitalize on a move toward the ET 8 resistance zone. This strategy allows us to participate in a fresh round of buying with a defined risk. We saw similar setups play out well during the rallies in 2025 after positive inflation prints.
However, the risk of a bearish reversal, as shown by the pink arrow, should not be ignored. If the market rejects these highs, a swift pullback could occur. Traders can prepare for this by purchasing put options, which would profit from a decline back towards the ET zone 7 support level.
For those expecting a small pullback before the next leg up, like the orange arrow scenario, selling out-of-the-money put credit spreads with a strike price below the 21 ema zone could be effective. This strategy benefits from time decay and a bounce at that key support area. Historically, even strong uptrends like the one in late 2025 featured brief, sharp pullbacks that rewarded patient bulls.
The 4-hour chart shows that the ET 8 zone has acted as a solid support level in the past. If we see a corrective dip back to this area, it could represent a prime opportunity to re-enter long positions. We will be watching for a bounce at that support to signal a continuation of the primary uptrend.
