Nasdaq 100 Elliott Wave Update: Assessing the Rally to 26700+ and Its Structural Integrity

The central investor question is whether the recent rally from the November low is a failed impulse or a corrective pause. The evidence points decisively toward the latter. The prior decline was not the start of a bear market but a corrective wave (W-4) within a larger uptrend, and the current move is structured as a five-wave impulsive advance.

The first clue is the index's behavior at the peak. It reached a high of 26182 on October 29, which fell short of the ideal 26700 target by about 500 points or 2%. This gap is notable because stock markets tend to be more precise. A clean, successful five-wave impulse would have hit or closely approached this level. The miss suggests the prior advance was incomplete, not a final top.

This interpretation is reinforced by the subsequent decline. The index fell to a low of 23854 on Friday, November 21. This level is significant because it landed squarely within the ideal (minor) W-4 target zone of 23000-24000. A corrective wave of this magnitude, ending in a zone that aligns with Elliott Wave targets, is the hallmark of a pause within a larger uptrend, not a breakdown.

The structure of the current rally confirms this. Applying the Elliott Wave Principle to the price action since the November 21 low, the move is clearly an impulsive move: five-wave advances and three-wave corrections. This five-wave pattern is the defining characteristic of an impulse wave, indicating the market is resuming its bullish momentum.

The bottom line is that the prior decline was a corrective wave (W-4) that served its purpose by providing a healthy consolidation after a strong advance. The current five-wave rally is the resumption of the primary uptrend. The market is not in a downtrend; it is in a corrective pause that has now resolved to the upside. The path forward, according to this wave count, is for the rally to continue toward the original 26700 target.

The Bullish Case: A Final Wave to 26700 or a Larger Rally to 28000?

The bullish scenario for the NASDAQ 100 hinges on a specific wave structure that treats the recent decline as a corrective phase, not a trend reversal. The preferred mechanics point to a final, impulsive fifth wave (W-5) targeting the original 26700 level. This setup is contingent on the rally from the November low holding above key support. The index bottomed at 23854 on Friday, November 21, within the ideal (minor) W-4 target zone, establishing a low-risk buy zone. Since then, it has climbed to around 25575, remaining above the critical weekly close level of 24000. This structure implies the prior drop was a minor fourth wave correction, setting the stage for a final fifth wave advance.

The technical foundation for this rally is built on positive divergences. As noted, positive divergences are building in the technical indicators, suggesting that at this stage, the downside is losing strength, momentum, and selling pressure. This is a classic signal that a corrective decline is exhausting itself, providing a technical green light for the anticipated upside impulse. The wave count supports this, showing the current move as an impulsive five-wave advance, which is the hallmark of a bullish trend resuming.

An even more aggressive scenario combines multiple analytical frameworks. By integrating Elliott Wave with seasonality and a Pi-based cycle, the projection extends beyond the immediate 26700 target. This multi-factor model suggests a continued rally to 28000 by late April, 2026. The key turning points for this extended move are identified around April 18-28, 2026. This scenario assumes the final W-5 wave not only reaches the 26700 target but then rolls over into a new, larger impulse phase, potentially fueled by favorable seasonal patterns and cyclical timing.

The bottom line is that the bullish case is structured and multi-layered. It begins with the corrective nature of the prior decline, confirmed by wave patterns and weakening momentum. The immediate target is the 26700 level, supported by the wave structure and the index's ability to hold above its November lows. The more ambitious target of 28000+ by late 2026 introduces cyclical timing as a catalyst, suggesting the rally could have further legs after the initial wave completes. For now, the critical support is the November low; a break below that would invalidate the preferred wave count and the entire corrective narrative.

Risk & Guardrails: Where the Bullish Thesis Could Break

The bullish Elliott Wave narrative for the NASDAQ 100 is clear: a powerful impulsive rally from the April lows is now in its final fifth wave, aiming for new highs. This wave is the culmination of a larger corrective pattern, and its success hinges on a single, critical structural guardrail. The entire thesis rests on the index holding above a specific support level.

The critical support level is the November 21 low at 23854. A daily close below this level would be a definitive signal that the bear market is underway, invalidating the corrective W-4 scenario and the entire impulsive wave count. It would suggest the recent rally is a failed attempt to re-establish a higher base, and the downtrend from the prior high is resuming.

This support level is part of a stepwise risk gauge. The Bulls' short-term warning levels are set at 25443, 25158, 24873, 24542, and 23854. Each daily close below one of these levels increases the probability that the uptrend from the November low is over. These levels act as a clear, technical stop-loss for the bullish thesis, providing a structured way to monitor when momentum is shifting.

The bottom line is that the bullish case is not a passive one. It requires the index to hold its ground against these defined levels. A failure of the current impulsive rally to hold above key moving averages or exhibit classic 5th wave exhaustion patterns-such as a volume divergence where price makes a new high but volume fails to confirm it-would signal the rally is stalling. The market's behavior relative to these guardrails will provide the first concrete evidence of whether the wave count is still valid or if a structural shift to a bearish outlook is beginning.

Catalysts & Scenarios: Mapping the Path Forward

The Elliott Wave analysis for the NASDAQ 100 provides a clear roadmap for the market's next decisive move. The immediate catalyst is a test of a critical resistance zone. The rally from the November low is an impulsive five-wave advance, and the next key level is the 25443-25158 resistance zone. A decisive break above this range would confirm the bullish 5th wave is intact, targeting the ideal zone near 26700. Conversely, a daily close below 25158 would trigger a deeper W-4 correction, opening the door for a move back toward the 23854 low.

The longer-term catalyst is a powerful confluence of technical and cyclical forces. The analysis suggests the rally could extend to 28000 by late April, 2026. This projection hinges on the convergence of the April 2026 Pi-cycle peak with seasonal strength. For this scenario to play out, the market must first hold above the November low support. If the rally stalls or breaks down, the path to this higher target is blocked.

The failure scenario is a breakdown below the established support. A decisive break below 23854 would invalidate the current bullish wave count. It would signal the start of a larger W-4 correction, with the primary target zone being 20485-22835. This would represent a significant retracement and a major shift in the market's momentum.

The bottom line is that these catalysts provide actionable signals. The 25443-25158 zone is the immediate battleground. A break above it would confirm the uptrend and point toward 26700, while a break below it would trigger a deeper correction. The path to 28000 requires navigating this near-term resistance and holding key support. For now, the market is trading around 25575, just above the critical 25158 level, meaning the decision is pending.