The Nasdaq 100 and other US indices are all lower on the day after dismal data dampened investor sentiment. In addition to the colossal contraction in the US GDP by 32.9%, the initial jobless claims came in at 1434K, which was less than the 1440K predicted by the markets but more than last week’s 1422K. This number ensures that initial jobless claims continue not just to remain in the millions, but has shown an upward reversal of the downward trend noticed in the past seven weeks.
The poor performance of certain Nasdaq-listed companies also contributed to today’s drop. Intel continues to slide and is on the verge of extending its losing run to 6 weeks. The company’s fortunes could get a lot worse as the Schall Law Firm has filed a Class Action lawsuit on behalf of investors who have lost more than $100,000.
The Nasdaq 100 is trading at 10571.2 currently, as the downward move remains limited by the presence of the support line at 10505.4.
Outlook for the Nasdaq 100
Price action on the Nasdaq 100 index continues to trade within the ascending channel on the daily chart. The lower border of the channel intersects the 10505.4 support line, and this is where the daily candles of the last three days have found support.
The bounce could be the basis of an upside push towards the channel’s opposing border. However, this move has to overcome the 10866.5 resistance in the process. Attainment of the upper boundary will take the Nasdaq 100 above the current all-time highs at 11069.6, thus forming a new top for the Nasdaq 100.
However, if the Nasdaq 100 buckles under the weight of the negative fundamentals and breaks below 10505.4, we could see a run towards 10307.3 and 10156.5. Further support levels at 9867.1 and 9730.2 will require a steep drop in the index to come into play.