Nasdaq 100 Encouraged by Softer Increase in US ISM Manufacturing PMI Data
Data released this afternoon by the Institute of Supply Managers (ISM) in the USA, shows that economic activity in the manufacturing sector rose for the fifth consecutive month, but not as much as the markets expected. The ISM manufacturing PMI for September came in at 55.4, which was lower than the August 2020 reading of 56.0. This figure was also lower than the market expectation of 56.0.
Contributing to the softer reading for September were the following:
– a drop in the New Orders Index from 67.6% to 60.2%.
– a lower Production Index, which came in at 61.0% as opposed to the 63.3% seen in August.
The Inventories Index, Prices Index and Export Orders Index, all rose by 2.7%. 3.3% and 1% respectively over the figures seen in August.
The ISM noted that what had helped to sustain the growth pattern despite the ongoing coronavirus pandemic was the reconfigured factories, which were getting better at their new craft and were maintaining satisfactory output levels.
Technical Outlook for Nasdaq 100
The neckline of the double bottom pattern was breached earlier this week, with price bouncing off this neckline after the pullback of Tuesday/Wednesday. Today’s 1.38% increase is now targeting the 11567.6 resistance target, with 11794.1 and 12003.6 lining up as potential targets to the north.
On the flip side, a rejection at the 11567.6 resistance could allow for a pullback towards the 11176.3 support in a move which invariably threatens the new status of the neckline as a support. A breakdown of 11176.3 invalidates the pattern and opens the door towards 10866.5 or 10760.8.