The Nasdaq 100 is experiencing a seesaw trading day after the tech-heavy index quivered on the back of escalating US-China tensions surrounding the South China Sea. This has caused some ripples in the Nasdaq 100, which features many companies with trade and business links to China.
Semiconductors are bearing the brunt of this impasse, with Nvidia, Advanced Micro Devices, and Intel Corp are all trading lower on the day. Facebook and Amazon are also trading lower, as are several of the big stocks where bears are dominating.
Comments by Philadelphia Fed President Patrick Harker are also dampening sentiment on the market. Harker notes that the US path of economic recovery is likely to be uneven and slow. Harker also believes that the job market may not improve much by the end of the year, with the unemployment rate expected to stay above 10%.
Technical Outlook for Nasdaq 100
The recent candlestick setups paint a bearish picture. First, we have the candles of last Friday and Monday showcasing a bearish engulfing candle, and yesterday’s candle showing a pinbar.
However, the bulls are trying to stage a comeback of sorts, with the index now ticking upwards by 0.06%. We could see a lot of choppy intraday movement, as competing fundamentals continue to sway sentiment.
The channel’s upper border continues to serve as a possible resistance, primarily as it lies close to the recent highs. The Nasdaq 100 needs to breach the 10866.5 resistance (Friday’s high) as well as the all-time high at 11069.5 to post new records, well beyond the 11,000 psychological resistance level.
On the flip side, rejection at 10866.5 sets up a pullback to 10307.3. Only a breakdown of the channel will allow a further decline to 10156.5 and 9867.5, with 9730.2 and 9626.4 continuing to remain relevant downside targets within the context of recent price moves.