Courtesy of Chris Kimble
I am a fan of weekly charts over daily charts and monthly charts over weekly charts. As the month of February is nearing an end, the Nasdaq Composite could be creating a pattern that deserves a ton of attention!
This chart looks at the Nasdaq Composite Index over the past 30-years, on a monthly basis.
As we look back on this pattern, the Index created a bearish candlestick reversal pattern in March of 2000 at (1). This pattern reflected that buyer exhaustion was taking place after a 10-year run up in price. What a top this ended up being!
The Index has spent the majority of the past 20-years inside of this rising channel, with a double bottom/ higher lows taking place in 2002 and 2009, at the bottom of the channel.
The rally over the past 10-years has the index testing the top of this long-term rising channel.
As the month is coming to a close, I humbly feel it is important that we be aware that the Nasdaq Composite index, could be creating a “monthly bearish candlestick reversal pattern” at (2).
One month’s price action does not make a trend, nor prove that top similar to 2000 has taken place.
This monthly pattern does suggest that a buyer’s exhaustion point may have taken place within 1-month of the 20th anniversary of the Dot.com highs, at the top of a 20-year rising channel, after another 10-year sharp rally!
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