Nasdaq 100 Forms Bearish Pennant as Tech Stocks Plunge

Nasdaq 100 has recouped some of Tuesday’s losses; even as the bearish outlook remains. In the previous session, the tech-loaded index spiralled downwards amid inflation concerns and decline in technology stocks. Subsequently, the index dropped to its lowest level since 5th April. While the entry of some buyers has helped recoup some of those losses, investors are still digesting Janet Yellen’s remarks.

While at the Atlantic’s Future Economy Summit, the Treasury Secretary stated that hiking interest rates might be necessary to prevent the US economy from overheating. However, she later indicated that she was neither advising the Federal Reserve nor recommending tightening the monetary policy.

Nasdaq 100’s downtrend is also apparent in individual tech stocks. For instance, Twitter is down by 0.33% at $54.40. Amazon has also declined by 2.20% to 3,311.87.  

Nasdaq 100 Technical Outlook

Nasdaq 100 is finding resistance at 13,600 as the market lacks enough buying pressure to recoup losses from the previous session. At the time of writing, it was up by 0.22% at 13,563.7. While this is higher than Tuesday’s intraday low of 13,393.6, the index remains within a bearish pennant. Besides, on an hourly chart, it is trading below the 25 and 50-day exponential moving averages.

I expect Nasdaq 100 to continue finding resistance at 13,600 in the near term. On the lower side, the levels to watch out for are 13,500 and Tuesday’s 13,393.6. However, this thesis will be invalid if the index moves above 13,600. If that happens, the bulls will be targeting 13,716 and 13,800.

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Nasdaq 100 Chart

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