Nasdaq Composite falls off wedge pattern amid Boeing crash and Middle East conflict
Selling pressure increased and Friday’s session recorded a sharp 1.35% drop
The Nasdaq Composite Index ended last week on a bearish note after breaking below a rising wedge pattern that had been forming since mid-May.
The index had steadily climbed in a narrowing price channel, but the rally lost steam after hitting resistance at $19,800. That level marked a price rebalance area from a prior upside inefficiency dating back to February, making it a critical technical point.
- Nasdaq Composite breaks below rising wedge after rejection at $19,800 resistance
- Friday’s 1.35% drop, led by Boeing crash fallout and Middle East tensions
- 100 EMA and 20-day EMA now key support levels to watch for short-term direction
Once the index touched $19,800, selling pressure increased and Friday’s session recorded a sharp 1.35% drop. That decline pushed the index below the lower boundary of the wedge, confirming a short-term bearish breakout.
NASDAQ price dynamics (May - June 2025). Source: TradingView
The session low came in at $19,367, supported by the 100 EMA on the 1-hour chart. This EMA level helped slow the pace of the decline temporarily, leading to a slight recovery into the weekend. The index closed the week near $19,400, logging a 0.66% weekly drop.
Nasdaq reaction at EMA zones to guide sentiment as market weighs macro threats
The trigger behind the sharp Friday sell-off was twofold. First, a tragic crash involving an Air India Boeing 787-8 Dreamliner carrying over 200 passengers in Ahmedabad drove Boeing shares lower by 7% in the premarket. Given Boeing’s market weight and the sensitivity of investor confidence in the aerospace sector, this weighed heavily on the broader tech-heavy Nasdaq. Second, escalating tensions in the Middle East added another layer of pressure, curbing risk appetite across equity markets.
Technically, the 100 EMA on the 1-hour chart is now a critical support zone. If Monday’s session holds above this line, the index may attempt to retrace some of Friday’s losses. However, failure to hold this support opens up room for further downside, targeting the next support level near $19,200. This level aligns closely with the 20-day EMA, offering a likely checkpoint for buyers to re-enter the market.
Market participants are closely watching developments in the Middle East. Any signs of further escalation may prompt additional outflows from tech stocks and reinforce the bearish breakout. Conversely, easing geopolitical concerns may help the index resume its longer-term bullish structure.
Nasdaq bounced off midweek lows after triggering the year’s biggest volume spike. Support near $19,550 held firm as price reclaimed $19,800 to keep the weekly uptrend intact.
