Nasdaq Composite rebounds on low volume as recovery strength remains uncertain

Traders Union
All News
Financial News
Nasdaq Composite low volume

All news

Top Stories

Editors' Picks

Crypto News

Financial News

Currencies

Market Voices

Billionaires

Companies

Regulators News

Sholanke Dele

05.08.2025

Nasdaq Composite rebounds on low volume as recovery strength remains uncertain — Nasdaq volume weakens amid bearish seasonality

The Nasdaq Composite Index staged an impressive rebound on Monday, rising almost 2% in what marked its strongest daily gain since July 2.

The recovery followed Friday’s steep selloff, which had been the largest one-day decline since April. Investors re-entered the market, attempting to capitalise on the dip, even as macroeconomic headwinds and seasonal expectations for August continue to linger.

- Nasdaq rebounds 2% in its strongest daily gain since July 2 after Friday’s steep selloff

- Daily RSI turns bullish and price reclaims key EMAs but volume drops to lowest since July 7

- Futures rise 0.15% today but price must break above 21,057 to confirm momentum shift

Despite the strength of the price action, Monday’s rally was not supported by rising volume. In fact, it marked the eighth consecutive day of declining daily volume, and the lowest reading since July 7. This divergence between price and volume tempers the bullish tone and raises the possibility that the rally may be driven more by short covering and passive buying than by strong conviction from institutional investors.

Nasdaq price dynamic (June - July 2025). Source: Tradingview

Technically, Monday’s move did improve the Nasdaq Composite short-term structure. The daily RSI shifted from neutral to bullish, moving above the 60 mark. On the 4-hour chart, RSI recovered from bearish territory near 36 and now sits near 55, supporting the case for continued upward momentum if volume improves. The 20 EMA on the 4-hour chart was reclaimed, and the 1-hour chart now shows price holding above a tight cluster of EMAs—20, 50, and 100—all just below the 21,000 level.

Nasdaq short-term bias stays above stacked EMAs despite bearish seasonals

This EMA stack now serves as a short-term support base. If price holds above this level, the outlook leans bullish in the near term. Conversely, a break below these averages would reinforce seasonal tendencies for weakness in August, which historically sees softer performance after a strong July. This sets up a technical tug for control between momentum traders and those trading the seasonal cycle.

As of Tuesday's European session, Nasdaq futures are up 0.15%, hinting at a mild follow-through. However, price is facing resistance at 21,057, which marks a previously broken demand zone. Monday’s rally was capped at this level, so a clean break above it would be needed to confirm the strength of the rebound and validate a shift in structure.

The broader question now is whether this rally is a temporary bounce or the early stages of a new leg higher. Traders are watching closely to see which side gains control, as the current structure reflects both tactical bullishness and structural caution, shaped by low volume and macro uncertainty.

Nasdaq Composite rose after Trump denied the Powell firing rumor. Nasdaq Composite bounced near the 4-hour 20 EMA and closed at a new high of 20,730.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.