Nasdaq 100 Forecast: Tech stocks Recover, but Will the NDX Rally Hold?

Nasdaq 100 Key Points

The Nasdaq 100 is bouncing back with the help of strong earnings from the likes of Palantir (+13%) and Uber (+10%).
Watch for an NDX close either above the 18,400 level (which could come as soon as today) or a close below the 200-day MA near 17,800 to tip the odds in one direction or another.

At least for the moment, it seems like we’ve passed the moment of peak market panic yesterday morning. For a couple of hours, traders were wondering whether the global economy was on the verge of imminently tipping into recession after a soft jobs report and seemingly ambivalent Fed, exacerbated by the rapid unwind of the crowded yen carry trade.

“Turnaround Tuesday” is a named phenomenon for a reason: After spending a whole weekend thinking about which positions they’ll put on in the new week, traders often push markets too far in one direction on Mondays, setting the stage for a reversal of the extreme move on Tuesdays as cooler heads prevail.

I must admit though, it was hard to see how US indices, highlighted by the Nasdaq 100s -6% drop at one point yesterday morning, would be able to muster a meaningful rally. The tech-heavy index bounced solidly off its lows yesterday and with the help of strong earnings from the likes of Palantir (+13%) and Uber (+10%), the index has now almost entirely erased yesterday’s losses to trade near unchanged on the week.

Nasdaq 100 Technical Analysis – NDX Daily Chart

Source: TradingView, StoneX

Looking at the chart above, the Nasdaq 100 remains below the key level of previous support/resistance at 18,400, and short-term bulls will be hesitant to buy back into the market aggressively as long as prices remain below that zone. On the bright side for long-term bulls though, NDX did hold above its 200-day MA, marking (for now) the third successful test of that key trend barometer going back to the start of the Nasdaq 100’s uptrend in early 2023.

Taking those two technical barriers together, we’re left with a neutral-to-bearish near-term outlook against a still-intact long-term bullish outlook. Rather than guessing which of those is more likely to win out now, readers may want to wait for a close either above the 18,400 level (which could come as soon as today) or a close below the 200-day MA near 17,800 to tip the odds in one direction or another.

-- Written by Matt Weller, Global Head of Research

Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.