The Nasdaq 100 index is surging to new highs on the back of the risk-on market sentiment, as global markets respond positively to stimulus measures and upbeat PMI reports on Tuesday. Investor sentiment is pretty high in global markets after a slew of optimistic results in the last two days tilted investor bias towards the risky end of the spectrum. Today’s PMI data from the Eurozone surprised the markets to the upside, providing a much needed boost to the Nasdaq 100 which had been stuttering around the 10,000 mark.
Furthermore, the market optimism was boosted on hopes that the US-China trade deal would proceed as planned without being derailed by recent tensions over Hong Kong and the origins of the coronavirus. A “China trade deal is fully intact” tweet by the US President Donald Trump calmed the nerves of investors after an earlier statement to the contrary by White House adviser Peter Navarro.
The Nasdaq 100 continues to trade in record territory as at the time of writing, posting gains of 1.08% to trade at 10242.8.
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Outlook for Nasdaq 100
Technically speaking, price continues to trade upwards, guided by the ascending channel beyond the resistance formed by the previous record high at 10156.5. The 227.2% Fibonacci extension of the downward price wave from March 9 to March 20 creates a potential area of resistance. This price level could be the next target for the Nasdaq 100 and would form yet another record high. 10518.1 (241.4% Fibonacci extension) is also another potential target if price advance continues beyond 10291.5. On the flip side, failure of the Nasdaq 100 to sustain the price advance could allow for a pullback. This potential pullback would first target the 10156.50 previous high which now acts as a support, with potential for a move below 10,000 if the decline continues. 9730.2 and 9626.4 form the only support barriers before the channel’s lower border is challenged by a selloff. 9452.0 and 9264.4 remain downside targets for any move which breaks down the channel.
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