Nasdaq 100 bounced back nicely the other day after meeting dynamic support. At this point, both bulls and bears have a case – bulls arguing for a bounce from dynamic support, while bears argue with the biggest short exposure on Nasdaq 100 since 2008.
InvestingCube's S&R Levels
In Buy Zone
Net Shorts Are Highest Since 2008
Nasdaq 100 net short interest reached the highest level since the 2008 Great Financial Crisis. The recent decline that exceeds 10% and may trigger profit-taking from some of the short-sellers. Here is why.
When the stock market declines more than 20%, from the highs, it is officially entering the bear market. But a decline of more than 10% merely represents an opportunity for late bulls to go in. Or, for early bulls to add to their positions – after all, if you want to buy the dip as an investor, this is your chance.
Tesla Battery Day to Move Nasdaq Today
Tesla’s event today will strongly influence the way Nasdaq 100 will close the day. Elon Musk hinted at some surprises to be announced today and also urged employees to give their best for the days that remained in the quarter as Tesla has a chance at a record quarter.
Tesla bounced the other day back to the opening levels and eyes the $500 mark. Any advance beyond will likely trigger buying interest on the Nasdaq 100 level too.
Nasdaq 100 Technical Analysis
Yesterday’s bounce from dynamic support comes in the context of profit-taking and Tesla’s expectations. As such, bulls would want to stay on the long side and target the projected neckline that acted as dynamic resistance so far (11,800). On the other hand, a move below 10,600 invalidates the bearish scenario and opens the case for a head and shoulders pattern with extremely bearish implications.