The Nasdaq 100 futures are up 2.25% on a day that has seen market optimism by investors in the global stock markets. The uptick in the Nasdaq 100 also coincides with a similar uptick in the Fear and Greed Index, which has shot up by 3 points from our last update to 36. This shows that traders are getting less fearful of plunging into the markets and are getting greedier. Coronavirus cases are starting to peak in many parts of the world and there is a general feeling among investors that the worst may have passed.
Earnings season is here, and despite the general consensus that a lot of companies could post bad results across board, it would seem that investors are more interested in the forward guidance provided by these companies as opposed to the current state of affairs.
Today’s upsurge in the Nasdaq 100 is led by Roku, which gained nearly 14% on analysts’ upgrades. Following closely is Tesla with its 13.6% premarket spike. Zoom Video, Vertex Pharmaceuticals are also other companies in the gainers’ chart at the moment.
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Technical Outlook for Nasdaq 100
The Nasdaq 100 is now testing the critical resistance at the 8442.5 price level. Above this level, 8691.0 marks the completion point of the price projection from the bullish flag pattern, and also marks the 127.2% Fibonacci extension from wave XA on the “W” harmonic pattern, which forms a butterfly.
A break of 8442.5 takes the Nasdaq 100 towards the 8691.0 target. At this price level, price could either advance towards 8925.4 (141.4% Fibonacci extension and lows of January 2020), which would then invalidate the W pattern and allow the Nasdaq 100 try for further advance.
On the flip side, prices could retreat either from 8442.5 or from 8691.0. If this is the case, then the reversal from point D on the harmonic pattern could be said to be in play, and traders would look out for possible downside targets at 8160.2, 8015.5(last week’s strong resistance now turned support) or even as lows as 7834.6. A break of 7508.9 breaks down point C on the harmonic pattern, and sets up a test of further support levels at 7241.2 and 6904.0.
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