The Nasdaq 100 continues to be on fire as it looks set to end the month in new record territory. Following the stock splits of Apple and Tesla, the Nasdaq 100 crossed above 12,000 for the first time in its history, notching up an intraday high of 12071.5 as it marches to yet another profitable month.
Apple and Tesla continue from where they left off before the stock split. Tesla is currently trading at 11.52% higher on the day following the stock split that reset its price to $457.12. Apple is also doing well on the day, notching up gains of 3.9% as at the time of writing.
These stocks are among several tech and pharmaceutical stocks that are propping up the Nasdaq 100 this last day of August. August has been an excellent month for the tech stocks, with Tesla, Amazon, Apple, Nvidia, Netflix and Advanced Micro Devices all posting gains. With gains of 10.64% produced by the Nasdaq 100 in August so far, only April has been a better month for the Nasdaq 100 in 2020 with gains of 14.87%.
Technical Outlook for Nasdaq 100
Price action on the Nasdaq 100 has effectively burst through the channel’s upper border, following the initial break and pullback of last week. The initial resistance could be seen at the 12120.2 price level, where the 127.2% Fibonacci extension of the price swing from the 2019 lows to the price swing of 19 February 2020 resides.
Conversely, a pullback will initially target the 127.2% Fibonacci extension at 11567.3, and requires that price pushes back into the channel as a precondition. Further declines could send the index towards the 11271.2 support (6 August high and 18 August low), with 11176.3 lining up as a potential support to the south. This support, as well as other potential support levels at 10866.5 and 10505.4, require a total breakdown of the channel to come into play.
However, the momentum is all on the side of buyers, and any price dips may be viewed as opportunities to engineer re-entry trades that follow the uptrend, until the sentiment changes. Friday’s jobs report may be a game-changer if it fails to deliver to expectations.