Nasdaq 100 Attempt a Comeback – Sentiment Remains Fragile
Nasdaq 100 started the day higher after two consecutive days of heavy losses that send the index close to two months high cancelling the rally that began in October 2019. Stocks are trying to stabilize after the intense sell-off due to coronavirus outbreak and the negative impact on the global economy. South Korea reported 169 new cases and one morel death. South Korea’s total confirmed cases approaching 1,155 with 11 fatalities. Italy reported 12 deaths and remains a key concern for Europe. China has more than 78,000 coronavirus cases and 2,715 deaths.
Shares would be under pressure as more companies might proceed to revenue warnings due to the coronavirus crisis, and the disruption in demand and the supply chain.
Traders disappointed yesterday after the US Consumer Confidence Index for February dropped to 130.7 below the expectations of 132. Today the United States New Home Sales Change came in at 7.9%, topping the expectations of 3.5% in January.
Nasdaq trades 1.59% higher at 9,112 as the index attempts to return inside the Bollinger Bands. The index has cancelled the short term momentum as it breached below the ascending trendline that began back in October 2019. The longer-term picture is still positive as the Nasdaq holds above the upward trendline from the beginning of 2019.
On the upside, immediate resistance for the Nasdaq 100 will be met at 9,131 the daily top. 9,241. More offers might emerge at 9,254 the 50-day moving average. In case of a break higher the next supply zone stands at 9,324 the high from February 24th.
On the downside, Nasdaq initial support will be met at 9,010 today’s low. Next critical support stands at 8,930 the low from yesterday’s sell-off. In case of a further correction in Nasdaq the next support area is at 8,807 the 100-day moving average.