On a day most global markets were either trading lower or traded cautiously, the Nasdaq 100 continues to power ahead, thanks to Tesla stocks. Tesla share price is ploughing ahead as Elon Musk tweeted yesterday that the Tesla electric car factory in Alameda County in California would reopen for production. This tweet, which defies the county’s coronavirus regulations, has sent Tesla share price nearly 1.88% higher in premarket trading.
This factory is the only Tesla electric car plant in the US, and its reopening carries much symbolism: recovery of the US economy, even though this does not mean a return to societal normalcy.
The Nasdaq 100 is trading higher today, but there is still the possibility that the upside could be limited by concerns that reopening the economy may be premature, especially with the coronavirus outbreak in the US yet to be contained.
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Nasdaq 100 Technical Outlook
Over the last month where I have covered the Nasdaq 100, I have traced out several technical patterns on the chart which have provided insight on possible price moves. The latest of such is the ascending channel on the daily chart, where today’s candle has formed a Doji, following yesterday’s short bullish candle. This is a critical setup which may provide more insight as to whether the recovery run of the Nasdaq 100 has started to falter.
Price is now at the upper border of the ascending channel. If price breaks above this price level (with a 3% penetration close to the upside or two successive daily candles that close above the channel), then the break would be confirmed, and open the door for a push towards 9452.0. This scenario would bring the Nasdaq 100 to within 300 points of its all-time highs in what would have been a fantastic recovery run spurred by the stimulus package of the Fed.
On the flip side, if price stalls at this point, we would need to see a bearish candle that could announce the reversal of price from point D in the harmonic crab pattern. 9264.4, 9167.4, 9092.3 and 8945.7 all remain valid support targets for any possible reversal move, in that order. The price action candles for this week could be crucial in determining further direction on the Nasdaq 100.
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