Nasdaq 100 index Technical Forecast: Bullish

  • The Nasdaq 100 index is attempting to breach an immediate resistance level at 14,950
  • The overall trend remains bullish-biased, strengthening the case for a successful breakout
  • The MACD indicator formed a bearish crossover however, pointing to weakening upward momentum

Nasdaq 100 Chart

Chart by TradingView

The Nasdaq 100 index extended higher towards the weekend, aiming to breach an immediate resistance level at 14,950 – the 261.8% Fibonacci extension. A successful try may pave the way for prices to penetrate further into record territory. A failed attempt however, may lead to a pullback with an eye on the 20-day SMA line for support.

The MACD indicator retreated from recent highs and has formed a bearish crossover, suggesting that upward momentum may be weakening. The Nasdaq 100 registered an eye-watering gain of 15% over the last two months, rendering it susceptible to a technical pullback when profit-taking kicks in.

The index is facing perhaps a “reality check” this week because the majority of the FAANG companies are releasing Q2 results. Earnings optimism means that the margin for error may be thin, and the pandemic winners may see their revenue growth slowing due to the resumption of outdoor activity and economic reopening.

The overall trend remains bullish-biased for the Nasdaq 100 and other major US indices, with prices having formed consecutive higher highs and higher lows over the past few months. A busy earnings calendar and the FOMC meeting may set the tone for trading in the coming week.

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

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