Chart of the Day - Wednesday, January 31, 2024

🏆 Today's Chart of the Day was shared by Jamie Saettele (@JamieSaettele)

• The Nasdaq 100 ($QQQ) dropped -1.96% today, marking its worst day since the Oct. 26th low. On a brighter note, it closed January at record highs for the second month today.

• The next potential support level for $QQQ is about -3% lower, at $400. This level represents the prior cycle highs from 2021. If $QQQ falls below $400, it could result in a failed breakout.

• Jamie points out that today's reversal took place at the upper bounds of the rising channel that has been in place since 2010. $QQQ ventured outside of this 14-year channel after the pandemic in 2020, but it relapsed in 2022 at the onset of the bear market.

The takeaway: The breakout remains intact despite today's bearish reversal, but the Nasdaq could face a much larger decline if it fails to hold above $400.