A technical update on the Nasdaq 100 A technical update on the Nasdaq 100 A technical update on the Nasdaq 100

A technical update on the Nasdaq 100

Equities 4 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  Equities have been on a roll and the Nasdaq 100 index is no exception. But where does it go from here – higher still or a retreat? Here's what a technical analysis of the charts says.


The Nasdaq 100 index has rebounded and recovered what it lost during the December sell-off. It's hovering around the 200-day simple moving average and is close to testing the resistance at around 7.100.  (The S&P 500 and Dow Jones indices look almost identical in their behaviour.) 

The Nasdaq 100 has formed what looks like a rising wedge pattern ripe for a correction ie. a bearish break of the lower rising trend line. However,  I do believe we could see US equities move higher over the next couple of days towards the resistance at around 7.200. Ideally a top should be in place Friday or Monday. 

RSI and MACD are bullish with minor divergences. That divergence could, however, be traded out over the next couple of days. Watch out for RSI breaking its rising trend line as it could be first indication of a coming correction. 

An alternative scenario which sometimes occurs could be a sideways break out only for the index trying to get back above the lower rising trend line, leading people to believe it was a false bearish breakout. The market would makes a new exhaustive high and then turnaround. Let’s see how it will play out. Keep those stops close. A close below 6.970 could be first indication that a bear correction is unfolding.  

Support at 6.836 and around 6.600.

Nasdaq 100, daily. Source: Saxo Bank


Boulevard Plaza, Tower 1, 30th floor, office 3002
Downtown, P.O. Box 33641 Dubai, UAE

Contact Saxo

Select region

UAE
UAE

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.