Nasdaq 100 futures and those of other US markets fell on Wednesday as markets pulled back after a strong recovery on Tuesday fuelled by boosted investor sentiment. Today’s pullback has come on the back of a mixed grill of results, and also has a historical basis: the Nasdaq 100 has been unable to post two consecutive winning sessions for nearly 6 weeks now.
Tesla share price experienced a strong surge after a buy recommendation came from analysts at Goldman Sachs. Microsoft and Apple have also registered substantial premarket gains of nearly 5%. Amazon and Google are also posting gains, with Amazon trading at record high levels. Gains have been offset following premarket losses on Facebook, Regeneron Pharmaceuticals, FOX and the Kraft Heinz Company.
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Technical Outlook for Nasdaq 100
The Nasdaq 100 was able to hit the resistance target at 8691.0, which completed the price projection from the break of the bullish flag earlier identified in the pattern.
As identified in yesterday’s analysis piece, the key resistance levels to look out for were 8442.5 and 8691.0, which is the 127.2% Fibonacci extension drawn from the XA wave in the evolving butterfly-style harmonic pattern. Today’s drop adds credence to 8691.0 as the possible point D from which the downside will resume if the technical expectations of a butterfly harmonic pattern are to play out.
Continuation of the downward leg from the price rejection area at 8691.0 opens up an opportunity for a retest of the 8442.5 price level, which now functions as a support. Other possible price targets to the downside include 8160.2, 8015.5 and 7834.6, in descending order.
On the flip side, a break of 8691.0 will negate the parameters for the harmonic pattern and will open the door towards upside targets at the 8945.7 (close to the 141.4% Fibonacci extension level), 9092.3 and 9167.4, in that order.
The situation in the US markets continues to remain dynamic and will be dictated by the coronavirus situation as well as the earnings results of listed companies.
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