Stock Charts: From Oversold to Major Sell-off (QQQ)

May 11, 2022, 1:38 pm EDT

From Oversold to Major Sell-off (QQQ)

What will happen when the markets are oversold for the past 5 weeks? Is the rebound coming?

Usually, people expect a rebound after oversold conditions from a technical perspective. But, if it does not happen, it means that unusual events could happen. In other words, it is unusual to see 5-6 weeks of decline without a strong rebound. 

Therefore the possibility of a significant sell-off could get higher. 

Indeed, the higher rates (Fed adds 50 basis points) last week and high inflation(CPI 8.3%) today push the stock market to a difficult corner to digest. It should be the time to prepare for unusual activities and volatilities. 

The falling speed of the Nasdaq-100 index (QQQ) from 300 to 166 could be fast. Be careful. 

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