Nasdaq 100 pattern suggests rebound; what happened to Slack? Nasdaq 100 pattern suggests rebound; what happened to Slack? Nasdaq 100 pattern suggests rebound; what happened to Slack?

Nasdaq 100 pattern suggests rebound; what happened to Slack?

Equities 5 minutes to read
Peter Garnry

Head of Equity Strategy

Summary:  The three-week price action ending last Friday has happened before and if history is any guidance then the two-week future returns are positively skewed and significantly above the long-term drift in Nasdaq 100 futures. We also point out more soft indicators such as call option volume in Apple and Tesla suggesting risk appetite is intact although at a lower level compared against the previous weeks. We also look at Slack which saw its shares plunge 14% yesterday on disappointing billings although our view is that this phenomenon is only temporary.

The rebound in Nasdaq 100 futures is under way although there is a lot of wood to be chopped before getting back to the highs. Yesterday’s session saw a 4.2% move from intraday lows to the close in the future and today US technology stocks are nervously higher although not by much. As we alluded to earlier this week it would be interesting to observe the willingness to buy the dips and whether US retail investors would aggressively participate and especially in call options again after last week’s implosion of weekly call options. So far call option volume remains high across stocks such as Apple and Tesla but still down from the record levels in the weeks prior to the sell-off. It indicates that the rebound has some fuel.

Source: Bloomberg

Previous similar price action in Nasdaq 100 suggests rebound

Statistical analysis in financial markets is a fickle thing but when you observe a move like the past week it poses questions. We created 21 features on the Nasdaq 100 futures over a three-week running period ranging across price actions indicators. We then used a method called dynamic time warping to match the recent three-week price action period in the Nasdaq 100 futures with history going back to July 2000. In other words, we were looking for previous periods that were like this recent period from 14 August to 4 September (last Friday). We then isolated the 40 most similar periods and calculated their forward 2-week return.

The histogram below shows the distribution of those 2-week forward returns. It has a negative skewness, but the large negative return is the 2-week forward return from the 21 February 2020 starting point, so just ahead of the COVID-19 declines. If we remove this observation, which is arguably driven by a once-in-century event, the skewness becomes positive with an average 2-week forward return of 1.6% compared the historical average 2-week return of 0.3%. The technical price action setup thus suggests a rebound in Nasdaq 100 futures, but remember past performance is no indication of future performance. 
Source: Bloomberg and Saxo Group

Slack Technologies was down 14% yesterday on its earnings report despite revenue beating estimates and negative effects from the pandemic are slowly disappearing. The fiscal year guidance on revenue was also above the consensus estimate. However, Wall Street zoomed in on the Q2 billings that came in at $218mn against estimates of $233mn indicating a growth slowdown. Slack was one of the most anticipated IPOs of 2019 and has so far failed to live up to the hype with the stock down 32% since the IPO. Given the labour market indicators dynamics over the past couple of months we believe the billings will stage a comeback over the coming quarters surprising analysts.

Despite the negative sentiment due to the disappointing billings the quarter was still the best in the company’s history with cash flow from operations rising to $14.5mn and free cash flow hitting $10.8mn. The current trajectory indicates that the company will continue to grow revenue by around 30% per year. However, the competition is heating up with especially Microsoft going aggressively after Slack’s business.

Source: Saxo Group

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.