Nasdaq Composite Index eyes rebound on Fib-EMA confluence after wedge fallout
Nasdaq rebound was short-lived after wedge trendline retest
The Nasdaq Composite Index is undergoing a short-term correction, but the broader technical structure suggests the pullback is part of a larger bullish formation.
The index had broken down late last week from a rising wedge pattern, typically a bearish signal. However, the decline was cushioned at the 100 EMA level on the 1-hour chart, which held firm at $19,370 and prompted a rebound early this week.
- Nasdaq rebound was short-lived after wedge trendline retest
- Daily RSI structure stays bullish despite intraday correction
- 100 EMA and 61.8% Fib zone may anchor next price recovery
This rebound led to a retest of the wedge’s former support trendline, which has flipped into resistance. The retest occurred near $19,740, where the index price was rejected and reversed. On Tuesday, the index declined by over 1% to reach $19,490, slipping just below the 50% Fibonacci retracement level from the latest bullish leg. This failure to break back above the trendline confirms its role as resistance and affirms the relevance of the rising wedge breakdown.
NASDAQ price dynamics (May - June 2025). Source: TradingView
Despite the rejection, the larger price structure still shows the Nasdaq within an upward move. The recent decline appears more like a corrective phase rather than the beginning of a broader downturn. This notion is supported by technical indicators across multiple timeframes. While the 1-hour RSI has dropped below 50, pointing to weakened momentum in the short term, the daily RSI still maintains bullish posture, suggesting the broader trend is still constructive.
Nasdaq Composite daily RSI signals bullish structure stays intact
Focus now shifts to the Fibonacci 61.8% level, where price could be stabilizing. This zone coincides with the 100 EMA on the 1-hour timeframe, strengthening its credibility as a potential base for a recovery. Should this level give way, the next technical cushion lies near the 76.8% retracement, which may attract dip-buying interest if sentiment aligns.
As of the premarket session on Wednesday, June 18, the Nasdaq Composite Index is still up nearly 0.6% on the week. This supports the view that despite recent intraday weakness, the overall bullish sentiment has not been structurally compromised. Traders will watch how price behaves around these Fibonacci zones to gauge whether this retracement has run its course or if deeper losses are in play.
Nasdaq reversed gains as geopolitical tension and Boeing crash triggered sharp selling. Price broke below the rising wedge while holding near the 100 EMA for possible support.
