Nasdaq 100 Looking for Direction As 11,000 Remains Elusive
The Nasdaq 100 continues to search for any positive influence that can redirect it above the 11,000 as the week rounds off with weak data. On a light day of trading, the Nasdaq 100 is down by 0.03% after data from the Census Bureau showed that Durable Goods Orders in the United States grew by less than expected for the month of September 2020.
A 0.4% increase in Durable Goods (versus consensus of 1.1% and previous of 11.4%) marked a sharp and surprising reduction, while core durable goods also grew by 0.4% when the markets expected growth of 1.0%. The previous number had registered at 2.6%.
The data round off a week of weak data for the US economy. Earlier this week, disappointing Flash Manufacturing PMI data provided a foretaste of what was to come. Orders for transportation equipment rose 0.5% and constituted the bulk of the increase in durable goods orders. Demand for aerospace parts and automobile components shrunk. No orders for civilian aircraft were registered in September, following the same picture seen in August as Boeing continued to grapple with the cancellation of orders for its embattled 737 MAX aircraft.
The US markets have had a negative response to the data, and the lack of any progress in providing new stimulus from the US Congress continues to constitute headwinds to an uptick on the Nasdaq 100.
Technical Outlook for Nasdaq 100
The latest price action is starting to evolve into a falling wedge pattern, even as price congregates around the 10866.5 support area. A breakdown of this support could come from the pressure of the wedge’s upper border, bringing 10505.4 into focus as a potential downside target.
On the flip side, resolution of the wedge into a bullish break targets the 11176.3 price area initially, with 11567.6 and 12003.6 forming potential new targets to the north.