Do not bet blindly on the Nasdaq 100 upside. Having gotten that warning out of the way, it needs to be noted the current buying trend in the index is starting to show signs of sincere bullishness. Upon this weekend’s announcement that the E.U and U.S have made a trade agreement, behavioral sentiment in U.S equities ramped up a notch and upon opening for the week’s trading the Nasdaq 100 jolted to new record highs.
Going back to the opening sentence, traders need to keep their ambitions realistic if they are pursuing the Nasdaq 100 with solid risk management. After yesterday’s magnificent opening which saw the Nasdaq 100 touch 23,440.00 vicinity, a solid reversal lower occurred and a low around 23,293.00 was challenged. Profit taking was certainly a factor in some of selling surge, but quickly after moving lower the 23,300.00 level became a battleground again and incremental buying continued to be seen.
New Heights and Prospects for More Buying
Coming risk events shadow the markets. Wednesday will see the Federal Reserve make its FOMC Statement. Fed watchers believe Jerome Powell will still use the word uncertainty, but the real question is if he will suggest there is a possibility the Fed will cut interest rates in the mid-term. A rate cut tomorrow would be a surprise, but it not totally out of the realm of possibility. The U.S economy has been showing improvement and inflation is rather tame. However Powell remains concerned about tariffs.
Financial institutions on the other hand are betting on their jubilant outlooks. President Trump has managed to produce a trade agreement with Japan and the E.U in recent days, that is looked upon positively. The Nasdaq 100 has responded to improved sentiment with buying. Record levels are showing an ability to sustain heights.
The Trend in the Nasdaq 100 is Tempting
Yes, there are moves downwards in the Nasdaq 100 frequently, but the upwards trend has certainly been the friend of buyers who are using conservative leverage and have patience. Even as more tariff news awaits and jobs numbers will be delivered on Friday, it may be logical to believe the Nasdaq 100 may continue to create higher momentum.
- Traders should remain realistic about their targets.
- Financial institutions appear to be buyers and this may not change near-term.
- Daily intraday results can always prove difficult for traders who are vulnerable to small changes in value due to limited funds.
- If the 23,450.00 mark is broken today and sustained higher this would be of interest.
- Tomorrow’s trading as the Federal Reserve steps into the limelight will cause volatility.
Nasdaq 100 Short-Term Outlook:
Current Resistance: 23,445.00
Current Support: 23,400.00
High Target: 23,520.00
Low Target: 23,360.00