Chart of the Week: Nasdaq Support

The Nasdaq has pulled back about 140 points over the past 7 sessions – about 6.5%; Looking at near term support, we are about ¾s of the way to the ascending triangle the Nasdaq broke out from in late December.

Nasdaq Support
Source: Gary B. Smith, Real Money

If you want to add or initiate Nasdaq positions, scale in as the index moves towards that breakout point. The retracement towards those level would provide lower risk entry points.

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Quote of the Day
“People are overconfident. Psychologists have determined that overconfidence causes people to overestimate their knowledge, underestimate risks, and exaggerate their ability to control events. Does overconfidence occur in investment decision-making? Security selection is a difficult task. It is precisely this type of task at which people exhibit the greatest overconfidence.”
John Nofsinger, Investment Madness

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