Nasdaq 100 Analysis: Can the Bullish Momentum Continue?

US cash equity markets are closed for Thanksgiving, but index futures rose during Thursday’s shortened session, buoyed by stronger European and Japanese market performance. European indices, led by technology stocks, snapped a two-day decline, advancing around 0.5 to 0.8 percent. It was reports suggesting milder US restrictions on semiconductor and AI memory chip sales to China that provided support. Despite the current gains, a correction may be necessary before the market can sustain a significant upward trajectory, but so far, the technical Nasdaq 100 analysis is still bullish and we haven’t seen a reversal stick.

Subdued US Markets Amid Limited Catalysts 

The divergence between US and international markets has been notable this year. Optimism about a pro-growth administration in 2025 supports US markets, while protectionist policies weigh on Chinese and Eurozone equities. However, with much of the anticipated "Trump trade" already priced in, the scope for additional significant gains in the US remains limited. While a cautious outlook may seem warranted, a technical reversal pattern is needed before adopting a bearish stance on these markets. Still, the bulls may wish to proceed with extra care as US stocks are looking quite expensive now.   

Technical Nasdaq 100 analysis: levels to watch

Source: TradingView.com

The technical picture for the Nasdaq remains bullish, even though momentum has slowed. Our US Tech 100 chart shows higher highs and higher lows, keeping the trend intact. A key support level lies at 20,600, where the 21-day exponential moving average aligns with a bullish trend line intact since August. A daily close below this trend line could shift sentiment, with further support at 20,260/70 and a critical pivot at 19880-20,000 zone. A break below this latter level would signal a potential market top. Resistance at the July high of 20,760 remains a hurdle, even though we are currently trading above it. We need to see more evidence that the index can hold above it. Despite recapturing this level after the US presidential election, the market failed to hold it, triggering a sharp sell-off a couple of weeks ago. A decisive break above this high this time could pave the way toward the all-time high of 21232 and beyond. 

Nasdaq 100 analysis: Trade Ideas

For now, the bullish trend in Nasdaq remains intact. Traders should watch for signs of breakdown or a resumption of momentum to define their strategies. While the market may be nearing resistance levels, any short-term pullback above the trend line could offer buying opportunities. What the bears are looking is a clean break below the trend line and support around 20,600 which would be a bearish signal.

In conclusion, while Nasdaq analysis points to continued bullishness for now, although the road ahead could be bumpier, requiring careful monitoring of technical and macroeconomic indicators.

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R

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