LIVE MARKETS-Nasdaq composite: Lots of chop as tries to avoid a bigger drop

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NASDAQ COMPOSITE: LOTS OF CHOP AS TRIES TO AVOID A BIGGER DROP

The Nasdaq composite .IXIC has been especially choppy of late. Indeed, since early December, the tech-laden index has made essentially no progress. It ended Monday down about 4% from its record closing high.

Meanwhile, bulls are hoping this setback will ultimately prove to primarily be a time correction, as the composite flirts with a broken long-term resistance line, which is now acting as support:

Since scoring a weekly close above this line in mid-November of last year, the composite has struggled to pull away from it. This line is now providing support at around 19,200. Monday's low was at 19,141.15 and then the composite recovered to end at 19,391.96.

With this, the index is posting a year-to-date gain of just 0.42%. However, that may be a victory of sorts given that the S&P 500 tech sector .SPLRCT is down 4.7% in 2025, while chip stocks .SOX have also been disappointing with a more than 1% decline.

The Nasdaq daily advance/decline line .AD.O also remains beleaguered, hovering just above its mid-January record low.

That said, communication services .SPLRCL, the top performing S&P 500 group so far this year, with a near 9% rise, is helping to stem the bearish tide.

In any event, tech, chips, and the broader Nasdaq may need to come back to life, else the composite may finally succumb to a deeper decline.

A break of the Jan. 13 low at 18,838.91 can put the rising 40-week moving average (WMA), which is now around 18,250, at risk.

Since reclaiming this long-term moving average in late January 2023, the composite has only seen three weekly closes below it. Of note, there have been no back-to-back weekly closing violations of the 40-WMA over this period. The last close below the 40-WMA was in late October 2023.

Channel support from late-2022, is now around 17,300.

A thrust above the 20,204.58 record intraday high can suggest the advance is back on track. Channel resistance is now around 21,350.

(Terence Gabriel)

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