After a reversal of fortunes late yesterday following after-hours earnings from the FAANG set of stocks (Facebook, Apple, Amazon, Netflix and Google), the Nasdaq 100 resumed the slide today as a result of waning market enthusiasm.
Of the FAANG stocks, only Alphabet (Google) failed to make a positive impression, as a decline in its advertising business dampened the sentiment on the stock.
Besides, poor earnings from Chevron and Caterpillar have set off a round of selling on the Dow Jones and S&P 500 indices. Some of the negative sentiment could be rubbing off on the Nasdaq 100. Suggestions by US President Donald Trump on an election postponement yesterday seems to have added a degree of uncertainty into the polity and markets seem to have taken note. Today marks the end of the month, and some traders appear to be taking some profit to reposition themselves for August.
The Nasdaq 100 is currently 10838.4, or 0.59% lower on the day.
Technical Outlook for Nasdaq 100
The Nasdaq 100 was able to bounce off support at 10505.4 yesterday and push above the 10866.5 resistance. It would need a second consecutive close above that level to maintain the upward march towards the all-time highs at 11069.6. However, today’s candle has dropped below the 10866.5 and is making this outcome unlikely at the moment.
If the daily candle fails to close above 10866.5 today, we could see a further move to the south, which would retest the 10505.4 support once more. A breakdown of this support opens the path towards 10307.3 and possibly 10156.5. The actualization of the latter two price levels will also depend on the failure of the ascending channel.
Conversely, if there is a bullish reversal on the daily candle which allows it to close above 10866.5, then a run towards the record high will be on the cards.
Nasdaq 100 Daily Chart