A rebound in tech stocks is helping the Nasdaq 100 futures post an intraday rally, after Monday’s bloodbath in the US markets. Coronavirus spread across Europe induced risk-off sentiment which led to the Nasdaq 100 dropping steeply in Monday’s trading, but a rally by tech stocks is boosting an intraday rally.
Tech companies such as Amazon, Tesla, Microsoft and Google are all trading above their closing prices of yesterday, as are chipmakers AMD and Nvidia. The Nasdaq 100 is presently trading at 9143.5, well off intraday lows of 9056.9.
Read our Best Trading Ideas for 2020.
Technical Outlook for Nasdaq 100
Today’s recovery came off a bounce off the 9092.3 support line. This support was briefly violated yesterday but held firm. This enabled it to serve as the pivot on which today’s price action has held.
However, the market bias is still quite bearish; the coronavirus fears have not gone away, and even though some companies have announced progress with vaccine development, that is still some time away.
I expect the 9092.3 support level to be tested again. If the support continues to hold, then recovery of price towards the Jan 24 highs of 9264.4 cannot be ruled out.
However, if the 9092.3 support level breaks down, this could pave the way for further bearish action towards the 8945.7 price level; site of the previous lows of Jan 10 and Jan 28. Additional support lies at 8691.0 and could become relevant if continued risk-off sentiment continues to pressure the Nasdaq 100.
Don’t miss a beat! Follow us on Telegram and Twitter.
More content
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Follow Eno on Twitter.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.