Nasdaq 100 Trades Higher of China Agric Purchases, Quadruple Witching

A phenomenon known as Quadruple Witching, where single-stock options and futures, as well as options on stock indices and stock futures expire on the 3rd Friday of June (as well as March, September and December), may be responsible for the scramble buying that has placed the Nasdaq 100 on bid. The Nasdaq 100 index is up by is presently up 0.85% to trade at 10086.8, in a trading day which is seeing more action than yesterday’s lacklustre performance. 

A report that China may increase the pace of its purchases of US farm products as requested by Washington is also boosting the US markets today. These two fundamentals are helping the tech-heavy index to inch ever higher and closer to breaking to new records. Furthermore, the market perception that the Chinese agric purchase news may lead to warming of relations between Beijing and Washington is helping boost bullish market sentiment on the day.

The Nasdaq 100 is currently up by 4.7% on the week as it completes the recovery of 2020 highs and inches towards new record levels, despite an increase in coronavirus infections in several states. Despite investors currently ignoring the coronavirus situation in the US, this factor could still constitute headwinds for the Nasdaq 100 in the weeks ahead.

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Outlook for Nasdaq 100

An attempt to break the all-time high at 10156.5 was rejected firmly earlier today. However, the index could still make another attempt to break this level if bids for the asset remain at high levels. A successful break of this resistance allows 10291.5 to come into focus as a potential upside target, being the 127.2% Fibonacci extension from the price wave from of the price wave from the channel of early March to the 19 March low. 

On the flip side, a rejection at the channel’s upper border, where the all-time high is located, could spur a pullback move which may decide to re-target the lower channel border’s intersection with 9626.4. The support at 9730.2 is the intervening price target and needs to be breached for this move to play out. 9452.0, 9264.4 and 9167.4 are all potential downside targets if substantial downside momentum breaks down the channel’s lower border.

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