Is there an incoming potential bounce?

THE Nasdaq Composite (CCMP) has risen above near-term resistance at 14,895 despite concerns of overvaluations. Having experienced a somewhat healthy pullback, the Nasdaq Composite has also alleviated some of the overbought conditions seen recently.

Since then, it seems likely that the Nasdaq will have to stage a test of the recent breakout point around the trading band between 14,895 and 14,980 before being able to stage further rallies higher. A strong bounce off that level should be seen as strong confirmation of a resumption of the uptrend.

A breakdown from the identified trading band however will likely see the CCMP fall back to the previously established support band - which was also the previous breakout point for the index in mid-June, between 14,265 and 14,350.