Wave Structure And Key Levels
The rally from the November 2025 low is described as a diagonal (rising wedge). The fall from the January high is described as corrective due to overlapping price action. The move up from the Monday 9 March low is labelled as wave i of a larger impulse. A pullback in wave ii is mapped to 24,629–24,842, tied to the 38% and 61% Fibonacci retracement levels. After wave ii, wave iii is projected to push towards a retest of highs near 25,200, with 26,200 also given as a potential level. A drop to or below 23,854 is set as a point that would trigger a review of the wave count. For the past three months, we have watched the Nasdaq trade in a frustrating sideways range, with the CBOE Volatility Index (VIX) hovering in a tight band between 18 and 22. The strong, impulsive rally since Monday, March 9th, suggests this corrective period that began in January 2026 might be concluding. This could be the start of a new upward leg.Risk Management And Positioning
We are now looking for a temporary pullback into the key support zone between 24,629 and 24,842. This area represents a classic 38% to 61% Fibonacci retracement of the initial thrust up from the March 9th low. For traders, this could be an ideal area to start building long positions through bull call spreads or by selling cash-secured puts. If support holds, we anticipate a powerful wave ‘iii’ to develop, targeting the 26,200 level and new all-time highs. This view is supported by last week’s Producer Price Index (PPI) data, which showed cooling inflation, giving the Fed room to stay accommodative. A similar pattern was observed back in the fourth quarter of 2024, when a brief correction was followed by a sharp 12% rally into year-end. Risk management remains paramount, with the 23,854 level acting as our line in the sand. A decisive break below this horizontal support would invalidate the immediate bullish setup and signal a potentially deeper correction is underway. Any long derivative positions should have stops placed just below this critical zone to protect capital. Create your live VT Markets account and start trading now.
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