The Nasdaq 100 surged to new record highs yesterday as tech stocks and Amazon’s improved price projections from Jeffries and Goldman Sachs helped the tech-heavy index reach new heights. Today, the Nasdaq 100 hit 11,068.8 shortly after market open, hitting its highest level ever. However, the index has opted to take a breather on the day even as the Dow and S&P 500 surge higher.
Despite pushing lower, pharma stocks continue to give a good account of themselves on the gainers’ chart, with Midatech Pharma (185%), Immuron Ltd (59.75%) and Bionano Genomics Inc (29.97%) all in the top 10 gainers so far.
The question is now being asked: how far can the Nasdaq 100 go even though there is minimal improvement in the coronavirus situation and economic fundamentals?
There are some pointers to the effect that the Nasdaq 100 may not have run out of steam yet. Eventually, a coronavirus vaccine (or vaccines) will be designed and deployed for widespread human use. Before then, we will continue to see positive data from several pharmaceutical and biotech companies on the progress they are making, and these announcements will continue to move markets higher. Indices of global economic recovery will start to improve, even though it may take some time for this to be achieved. But any news that shows improvement in the numbers as we move along could be welcomed by markets.
As analysts at JPMorgan have indicated, the US markets are finding more traction from Chinese data or data from external sources. Attention in the US is gradually shifting to the coming presidential elections, and we could see markets gravitating towards the candidate who is seen as more friendly to wall street.
Technical Outlook for Nasdaq 100
The ascending channel continues to play a role in the price action on the daily chart. Once more, this channel’s return line has rejected further attempts to push above the channel. The higher the channel goes, the less relevant support areas below 10,000 will be. Right now, the channel encompasses support levels that are higher than 10,000. Therefore, any pullback that succeeds in breaching the 10866.5 support, which is where today’s intraday low is found, may extend towards 10505.4 (recent intraday lows). A decline towards 10,291.5 (227.2% Fibonacci extension) or 10156.5 will have to follow a breakdown of the channel. If this occurs, then 9867.1 and 9626.4 become more relevant.
A bounce from today’s intraday low at 10866.5 could allow for a renewed push to the all-time high at 11.068.8, with the 300.0% Fibonacci extension of the 10 March to 23 March move providing a possible target at 11,453.1.
Nasdaq 100 Daily Chart