Nasdaq consolidates below key highs

IN FEBRUARY 2026, the Nasdaq Composite found itself at a technically pivotal juncture following the formation of a double top pattern near the 26,150 level, marked by the October 2025 and January 2026 highs. This repeated failure to break decisively above this resistance zone signals potential exhaustion in the prior uptrend and raises the probability of a broader corrective phase.

The current consolidation phase spanning October 2025 through February 2026 bears resemblance to the November 2024 to February 2025 structure, where the market traded sideways before eventually resolving lower into a retracement phase.

From May 2025 onwards, the 100-day Simple Moving Average (SMA) acted as a reliable dynamic support level, cushioning pullbacks in November 2025 through January 2026 and reinforcing the prevailing bullish structure. However, the recent technical deterioration has shifted this landscape. The Nasdaq has now broken below the 100-day SMA, which currently sits near 25,240, and the level appears to be transitioning into support-turned-resistance.

Adding to the cautionary tone, all three key moving averages (20-day, 50-day, and 100-day SMAs) have converged in the month of Feburary. The 20-day SMA has crossed below the 50-day SMA, signalling weakening short-term momentum and introducing a bearish crossover dynamic. Such compression among moving averages often precedes expanded volatility, suggesting the market rearing up for a more decisive directional move.

Projecting a retracement similar in magnitude to the February to April 2025 correction, the Nasdaq could potentially decline towards 23,300, 21,800, or even 20,500, depending on the percentage symmetry of the previous pullback move. While these levels represent scenario analysis rather than base-case forecasts, they frame the downside risk expectations should selling pressure accelerate.

In the near term, the first meaningful support level sits around 23,980, which aligns with the November 2025 low and corresponds to the 38.2 per cent Fibonacci retracement level. A decisive break below this threshold would likely open the path towards the 50 per cent Fibonacci retracement near 23,300, reinforcing that zone as the next structural support.

Should downside momentum picks up, deeper retracement objectives such as 21,800 or 20,500 would come into view, though such a move would likely require sustained macroeconomic or sentiment-driven catalysts.

Conversely, if the Nasdaq manages to stabilise above the 23,980 support level, a technical rebound could occur. Initial resistance would emerge at the 100-day SMA near 25,240. A recovery above this level would neutralise immediate bearish pressure and shift attention back towards the 26,150 zone.

A renewed test around the 26,150 level would create the possibility of a triple top formation, should the index fail again to break higher. Multiple rejections at the same resistance band would reinforce structural ceiling dynamics and elevate the risk of a larger corrective sequence.

Beyond the technical landscape, macroeconomic variables remain influential. With global growth data, inflation expectations, and central bank policy positioning continuing to shape investor sentiment, the Nasdaq may remain range-bound in the near term as markets await a decisive catalyst. The convergence of moving averages, the breakdown below long-standing support, and the formation of a double top collectively suggest heightened sensitivity to upcoming economic developments.

From a technical standpoint, in February, the Nasdaq is trading in a more cautious profile compared with late 2025. The index is currently positioned between ongoing consolidation and the risk of a deeper correction. A sustained hold above 23,980 may allow for recovery attempts, but failure to defend that zone could accelerate retracement towards lower Fibonacci targets. Until a clear breakout or breakdown materialises, sideways movement within a broadening range remains the most probable near-term outcome as the market awaits its next directional catalyst.

The writer is manager of dealing and investor education at Phillip Securities