Nasdaq Outlook: All Time Highs Proceed

Nasdaq Futures: highs are 50 points away from the 20,000 threshold
Nasdaq Spot: retesting the upper limit of October 2022 channel
U.S PPI rates drop and unemployment claims rise

After Apple Intelligence made headlines this week, NASDAQ surged above 19,000. The momentum further accelerated with a significant drop in core CPI figures and beyond a more hawkish-than-expected Fed outlook, pushing NASDAQ above 19,600.

Today’s drop in PPI figures and the rise in unemployment claims still align with the Fed's rate target trajectory, benefiting U.S. indices. U.S. core PPI dropped to 0.0% from the previous 0.5%, and PPI m/m fell to -0.2% from 0.5%. Unemployment claims rose to 242k, surpassing the expected drop to 225k.

From a technical perspective:

Nasdaq Outlook: E-Mini Futures – Daily Time Frame

A significant gap was traced on the NASDAQ futures today up towards the resistance line connecting April and May 2024 highs. The price action is still portraying a bullish bias, given more supporting fundamentals for the extended uptrend. The possibility to reverse from current highs to fill the gap is also valid.

In terms of US 100:

Nasdaq Outlook: US 100 – Daily Time Frame

A new high has just been set at 19662 following the drop in PPI rates. Given the stand at extreme levels, here are the potential setups:

Bearish Setup:

From a contrarian perspective, the following indicators support a potential reversal from the 19660 high:

The relative strength index is in oversold territories
The trend is retesting the upper limit of the up-trending channel between October 2022 to the present date, connecting the highs of December 2022 and March 2024.
Elliott wave patterns are potentially in wave 5 of 5

Reversals could be supported near levels 19240 and 18900. A break below 18900 can drag the trend towards 18750 and 18500 respectively.

Bullish Setup:

Given the strong primary trend of Nasdaq, buying opportunities may arise along the trend’s retracements near the previously mentioned support levels. A break above the latest 19,660 high could propel the trend towards the 19,900-20,000 zone initially, and further to 20,200.

--- Written by Razan Hilal, CMT

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