Nasdaq‑100 Chart Signals Potential Bottom After Recent Bounce

Watch the video above for Frank’s complete chart breakdown.

Is the Nasdaq‑100’s recent bounce signaling that a market bottom has been reached? We’ll examine several charts to answer that question.

First, a brief recap of recent price action. In September, the NDX broke out of a bullish cup‑and‑handle pattern, which suggested a move up to around 33,200. That breakout proved short‑lived, however, and gave way to a bearish pattern that collapsed sharply two weeks ago.

The decline pushed the index close to its calculated downside target of 26,350 before the current rebound began.

Looking at a broader view, the bounce originated from a key confluence of support between 25,000 and 26,000. Three important levels intersected there:

• The uptrend line drawn from the early 2025 low through the early 2026 low.
• The 38.2% Fibonacci retracement of the 2025‑2026 rally.
• The former 2025 highs, which previously acted as resistance before becoming a breakout zone earlier this year.

This concentration of support helped spark buying after a roughly 15% decline.

For context, larger drawdowns of 20%, 30%, 40% and 50% would have been far more severe.

The chart tracks NDX drawdowns from 52‑week highs back to the post‑financial‑crisis era. Only a handful of declines exceeded 20%, and three produced relatively quick reversals: late 2018, the Covid lows in 2020 and April 2025.

Historically, buying during declines of about 15%–25% has generally been profitable, even when additional downside occurred first (highlighted in yellow).

Previous pullbacks of 10%–16% are shown in green, providing perspective on the current correction.

The major outlier was 2022, when the NDX fell nearly 36% over roughly ten months—a much worse outcome that has investors wary of a repeat.

That raises the key question: are we facing a routine correction or the early stages of a broader bear market?

A critical clue will be how far this bounce extends.

Any rally that fails to reclaim prior highs could create a significant lower high. Successive lower highs would strengthen the case for a prolonged downtrend.

We saw this pattern in March 2022, when an initial sharp rebound stalled below the previous peak before a deeper decline followed.

In summary, the current bounce is encouraging, especially given its support base and the historical success of buying during 10‑20% drawdowns.

Going forward, the key will be follow‑through. New highs aren’t required immediately, but if a rally meets fresh selling pressure, downside momentum could resume.

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