Nasdaq 100 - A fake rally or a genuine one?

On 21st June 2022, we abandoned our short-term bearish bias on the Nasdaq 100 index. Since then, the index has grown approximately 8%. However, we are again slowly turning bearish on the index as we think the current pricing starts to be attractive for short trade (re)entry. Despite that, we remain cautious and abstain from setting a price target for NQ1!. We will monitor the ability of NQ1! to stay above/below its 20-day SMA.

Fundamental factors
The negative factors like higher interest rates and economic tightening continue to persist. Moreover, in our opinion, these factors are poised to worsen as the FED officials are set to pursue more rate hikes and shrink the balance sheet. As a result, we expect that to drag the Nasdaq 100 index lower.

Illustration 1.01

The price retraced toward its 20-day SMA, representing a downtrend correction.

Technical analysis - daily time frame
RSI, MACD, and Stochastic are bullish. DM+ and DM- performed a bullish crossover. The ADX contains a relatively low value, suggesting the trend is very weak or neutral. Overall, the daily time frame is bullish.

Illustration 1.02

Illustration 1.02 shows simple support and resistance levels for NQ1!.

Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame stays bearish.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

Сделка активна:

Our new price target for NQ1! is 11 500 USD and 11 000 USD.