Market News & Analysis


Top Story

Nasdaq 100: Impulsive up move likely resuming supported by Fed

Medium-term technical outlook on Nasdaq 100 (US Tech 100)



click to enlarge charts

Key Levels (1 to 3 weeks)

Intermediate support: 8310

Pivot (key support): 8165

Resistances: 8460 & 8720

Next support: 7960

Directional Bias (1 to 3 weeks)

In our previous report on the US Tech 100 (proxy for Nasdaq 100 futures) dated on 04 Dec 2019, our view was a corrective pull-back first towards 8075/8000 before the another upleg unfolds. The Index had fared much better than our expectation, it printed a low of 8165 on 03 Dec and started to turn higher and almost erased all its losses from the previous slide from the 8454 current all-time high printed on 27 Nov to 03 Dec 2019 low.

Latest price action has reduced the conviction for the corrective decline and we flip to a bullish bias in any dips above 8165 key medium-term pivotal support for retest om 8454/8460 current all-time high area before targeting the next resistance at 8720.

On the other hand, a break with a daily close below 8165 revives the deeper corrective decline scenario to retest 7960 (former medium-term range resistance from 24 Jul/12 Sep 2019 & 50% Fibonacci retracement of the up move from 03 Oct low to 27 Nov 2019 high).

Key elements

  • The recent slide seen in the Index from 8454 current all-time high to 8165 low of 03 Dec 2019 has stalled right at pull-back support of the former ascending wedge resistance from 25 Apr 2019 high, lower boundary of a medium-term ascending channel from 03 Oct 2019 low and the 23.6% Fibonacci retracement of the on-going up move from 03 Oct low to 27 Nov 2019 high).
  • The daily RSI oscillator has also staged a rebound from a significant corresponding ascending support at the 50 level. These observations suggest a revival of medium-term upside momentum.
  • The 8720 resistance is defined by the upper boundary of the medium-term ascending channel from 03 Oct 2019 low and a Fibonacci expansion cluster.
  • Relative strength analysis from the ratio charts of Nasdaq 100 and the high beta Technology and Semiconductor sectors against the broader market index (S&P 500) is advocating outperformance of Nasdaq 100 and technology related stocks which has been reinforced by the U.S central bank, the Fed’s desire to keep its key interest rate on hold through 2020 after three cuts to bring down the fed rate to 1.5%-1.75% as indicated from its latest FOMC meeting outcome yesterday.   
  • A continuation of leadership seen in Nasdaq 100 and technology related stocks is likely to sustain the on-going medium-term uptrend of the U.S. stock market.  

 Charts are from City Index Advantage TraderPro & eSignal


Disclaimer

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.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital 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), GAIN Capital Singapore 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 GAIN Capital Singapore 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 GAIN Capital Singapore 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.

GAIN Capital Singapore 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 cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.