The Nasdaq 100 index has taken a pause today, as optimism surrounding the impending approval of the first coronavirus vaccines from Pfizer/BioNTech and Moderna appear to have waned. The downbeat retail sales data from October also seem to have weighed on the US markets, with the Nasdaq 100 trading at 0.5% in the red.
Today, a US District Court in Pennsylvania will hear arguments in a legal challenge brought by the Trump Campaign challenging the certification of Joe Biden as the winner of the state’s electoral college votes. If the campaign wins this challenge, this could add another layer of uncertainty to the outcome of the US election. Even though Joe Biden has been projected as the winner by AP and other press outfits, an official declaration is still a month away.
There is a lot for investors in the US stock markets to consider, which is why there has been low volume trading on the Nasdaq 100 today, and price action has been more on the selling side of the equation.
Technical Levels to Watch
Lack of follow-through buying amid the cautious sentiment on the day has allowed for a retreat in prices, with today’s candle finding support at the 12003.6 price level. The decline in the peaks on the Nasdaq 100 correlates with the progressively lower peaks seen on the upper boundary of the symmetrical triangle on the daily chart.
The Nasdaq 100 needs to break above the 12163.4 resistance, with follow-up buying to surmount the current all-time high at 12467.8 (2 September peak), for the uptrend to be re-established. This outlook is supported by the fact that price action preceding the onset of the triangle was bullish, and a bullish continuation is the outcome of the pattern 80% of the time.
On the flip side, symmetrical triangles as topping formations occur 20% of the time. If price declines below the lower boundary at the 11176.3 support, then we could see price cascading lower towards 10866.5 and perhaps 10760.8 and 10505.4. The Nasdaq 100 would need to take out several support levels at 11989.6, 11820.4, 11608.5 and 11176.3, in that order.
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Nasdaq 100 Daily Chart
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