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BULLS DEFEND 50-DMA AS NASDAQ EYES RECOVERY

With the recent corrections in chips and tech, the Nasdaq Composite .IXIC has taken the biggest hit among the three major indexes.

From its record close on June 2 through Wednesday, the index dropped about 7.2% in just six trading days -- a sharp move in a short span.

That said, there’s been at least one encouraging sign for the bulls. The Nasdaq has managed to hold above its rising 50-day moving average (DMA), which continues to act as solid support.

During the worst of this week’s selloff, that key trendline largely contained intraday weakness. In fact, the index hasn’t closed below its 50-DMA since April 7.

Momentum indicators have also begun to flash oversold signals. On Wednesday, the 9-day RSI fell to its lowest level since the late-March trough. Then came Thursday’s rebound -- a 2.5% jump, marking the Nasdaq’s strongest daily gain since April 8.

Heading into Friday's open, S&P 500 futures ESc1 are pointing modestly higher, buoyed by expectations for an imminent end to the Middle East conflict, while investors gear up for the market debut of Elon Musk's SpaceX. Nasdaq 100 futures NQc1 are roughly flat. This suggests the Composite, which closed Thursday at 25,809.66, may be indecisive at the open.

The next key test is whether the Nasdaq can push above Tuesday’s high around 26,260. A break above that level would disrupt the recent pattern of lower highs and lows. Reclaiming the 20-DMA, which ended Thursday near 26,355, could signal the index is back on track to challenge -- and potentially exceed -- its record intraday high near 27,190.

On the flip side, a failure to hold the 50-DMA (now near 25,129), followed by a drop below the June 9 low around 24,980, would suggest the downtrend is resuming.

Below that, there’s a band of longer-term support in the 24,000 to 23,990 area, tied to late-2025 and early-2026 highs. The rising 200-DMA sits lower, near 23,409. A pullback into the 24,000 to 23,500 zone would leave the Composite down roughly 11% to 13% from its record close.

(Terence Gabriel)

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