Nasdaq 100 Analysis: NDX Steady After its 2nd-Worst Day of 2023

Nasdaq 100 Takeaways

• The Nasdaq 100 saw its second-worst day of the year yesterday (-2.3%) on the back of mixed earnings results from Netflix and Tesla.
• The index remains above its 21- and 50-day EMAs, dynamic levels that have consistently provided support throughout the year.
• Only a break below support at 14,650 would call the year-to-date uptrend into question.

Nasdaq 100 Fundamental Analysis

Do fundamentals matter?

The Nasdaq 100’s price action through the first half+ of the year suggested that they may not, at least in the way that many investors believed. After all, the tech-heavy index had surged more than 45% from the start of the year to this week’s high, despite high valuations and concerns about a slowing global economy.

However, after the Nasdaq 100 fell -2.3% yesterday – the index’s second-largest 1-day drop of the year –  largely on the back of mixed-but-not-terrible earnings reports from Netflix and Tesla, traders are starting to wonder if the long-delayed fundamental reckoning may be at hand.

Next week brings major earnings reports from Big Tech behemoths Microsoft, Alphabet (Google), and Meta, and traders will be keen to see if as-expected (or even, gasp, below-expected) results could continue to weigh on the high-flying, and highly-valued, index.

Nasdaq 100 Technical Analysis – NDX Daily Chart

Source: TradingView, StoneX

As the chart above shows, there’s no particular cause for bullish concern yet. Even despite yesterday’s big drop, the Nasdaq 100 remains above its 21- and 50-day EMAs, dynamic levels that have consistently provided support to the index throughout this year. Meanwhile, yesterday’s fall has taken the index’s 14-day RSI out of overbought territory, potentially setting the stage for another leg higher if earnings come out strong next week.

In terms of the levels to watch, previous-resistance-turned-support at 15,250 aligns with the rising 21-day EMA and could be the first place where bulls look to rejoin the uptrend at “value.” If that level gives way, the longer-term uptrend could still remain intact above the 50-day EMA and previous support/resistance in the 14,650 area. Only a break below that barrier would call the established uptrend into question from a technical perspective.

-- Written by Matt Weller, Global Head of Research

Follow Matt on Twitter: @MWellerFX