NFP Report Sends Nasdaq 100 Higher, But Is the Index Out of Gas?

The Nasdaq 100 index is up by 0.29% after the stellar NFP report added to the previous upbeat employment data for the week. The ADP Employment Change showed that there were far fewer job losses in the private sector than initially feared in May 2020. The Initial Jobless Claims also showed that filings of less than 2 million claims in the last week; the first time in several weeks that claims had dropped below the 2000K threshold. 

Indeed, the NFP report was so good that US President Donald Trump has just tweeted that he will hold a press conference in a few minutes on the “jobs numbers”. But the Nasdaq 100 does not seem to be sharing the enthusiasm. Yes, it is up for the day, but a look at the daily candle closing prices of the last two sessions will show that the Nasdaq 100 is starting to form lower highs. Today’s intraday high is even lower than that of yesterday’s close. Is this a sign of burnout on the index which has bounced back strongly from its March 2020 lows, ignoring the initially terrible jobs numbers along the way?

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Technical Outlook for Nasdaq 100

The trading day is not over yet, and there is still a chance that the Nasdaq 100 could close at a price level which exceeds that of the last two days. If this happens, the Nasdaq 100 could be on its way to reclaiming the 2020 all-time highs. At the current price of 9741.9, the index is already above the 9626.4 resistance level. Yesterday’s candle was the second successive candle to close above this resistance, which confirmed the break. Today’s candle bounced off that level and is now higher on the day, attempting to reclaim the highs of the Wednesday candle. If it can close above that candle high, then the upside momentum would be preserved, and a push towards the all-time highs of 9755.9 would be in place. 

On the flip side, a lower close than the previous closing prices of the last two days may be a sign that the Nasdaq 100 may have started to run out steam. However, only a breakdown of 9626.4 would lend serious credence to this notion. A break down allows the index to retest the 9452.0 support, and further decline brings 9264.4 and 9167.4 into focus.

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