Wednesday, February 21, 2024
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Charts recommend the Nasdaq 100 might attain an ‘vital low’ this week, Jim Cramer says

CNBC’s Jim Cramer on Wednesday mentioned the Nasdaq 100 might attain a low this week and provides buyers an opportunity to dump some poorly performing shares, leaning on evaluation from technical analyst Carolyn Boroden.

“The charts, as interpreted by Carolyn Boroden, recommend the Nasdaq 100 might make an vital low someday this week — and possibly it is already occurred. If that is the case, then the latest” market storminess may very well be over in the intervening time, the “Mad Money” host mentioned.

“Nonetheless, you won’t need to get too hooked up to this transfer as a result of Boroden says the underlying technical image … stays ugly. Nonetheless, you could possibly get a superb probability to unload some tech right here to be able to increase cash to purchase different issues that may have a neater time out there going ahead,” he added.

The Dow Jones Industrial Common on Wednesday climbed 1.01%, whereas the S&P 500 rose 1.12%. The Nasdaq Composite elevated 2.03%.

Boroden makes use of the Fibonacci technique to make predictions in regards to the market. A cluster of Fibonacci timing cycles coming due across the similar time means a inventory or index may very well be poised to reverse course, Cramer defined, including that that is how she knew the market would bottom in mid-March

The Nasdaq 100 has been “nearly straight down since that cluster of Fibonacci timing cycles she talked about in March,” Cramer mentioned. He added that Boroden is keeping track of each time and worth parameters to search out the subsequent market low the place buyers might commerce.

“On the timing entrance, she says she has two durations the place the Nasdaq 100 is prone to make an vital low. The primary interval is yesterday and at present,” Cramer mentioned. “In different phrases, at present’s rebound may need extra endurance than you’d anticipate.”

“That mentioned, based on Boroden, whereas these Fibonacci timing cycles are actually useful … we solely get an precise reversal of the development about 60% of the occasions once we see these reversal alerts,” he added.

As for pricing, Boroden mentioned there’s the likelihood that the index as soon as once more reaches its lows from March 14, based on Cramer. But she nonetheless believes the Nasdaq 100 is in tough form as its worth stays beneath the 200-day easy transferring common and shorter time period 50-day transferring common, he added.

Boroden can be watching the five-day and 13-day exponential transferring averages, Cramer mentioned.

“When the five-day goes above the 13-day … that is her favourite purchase set off. When the five-day goes beneath the 13-day, it is her favourite promote set off. Proper now, Boroden says we’re definitively in promote territory, not in purchase territory,” he mentioned. 

That signifies that even when the Nasdaq-100 reaches a noteworthy low, buyers ought to nonetheless be prepared for the index to have one other “draw back failure,” Cramer mentioned. 

“As she sees it, we’re positively not out of the woods but, and she or he’s actually not making an all-clear name,” he added.

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