Open an Account
☰
Open an Account
✖

Index in Focus: NASDAQ 100 – trading at key level

February 14, 2023 3:06 PM

The NASDAQ 100 is trading at a key level. On the weekly timeframe, the NDQ pulled back to the 61.8% Fibonacci retracement level from the lows of March 2020 at 6771.91 to the all-time highs in November 2021 at 16764.86, near 10400.64.   Notice the downward sloping trendline that the NASDAQ 100 remained under.  From there, the index bounced to the 38.2% Fibonacci retracement level from the all-time high (see point 1) to the recent low in October 2022 between 16764.86 and 10400.64.  In doing so, price broke above the previously mentioned trendline during the week of January 23, 2023.  Price is currently consolidating at that 38.2% Fibonacci retracement level, near 12856.49.

Source: Tradingview, Stone X 

On a daily timeframe, the NASDAQ 100 has moved to 50% retracement level from the highs on March 29th, 2022 (see point 2) to the lows on October 13th, 2022, near 12853.03.  In addition, price has moved above, not only the previously mentioned downward sloping trendline, but also above the 50-Day and the 200-Day Moving Averages.  The large cap index appears to be consolidating in a flag pattern.  If it breaks above the top trendline of the flag, the target is near 14463.57.

Source: Tradingview, Stone X

On a 240-miunute timeframe, the NASDAQ 100 has already broken above the 61.8% Fibonacci retracement level from the highs of August 16th, 2022 (see point 3) to the lows of October 2022, near 12467.85.  Price has come back to this level in a consolidative pattern to form the flag.  If price breaks higher, the target is the length of the flagpole, added to the breakout point, which in this case is near 14463.57.  Notice that as price reached the peak of the flag, the RSI was in overbought territory.  Upon the consolidation, the RSI was able to unwind back into neutral territory.

 

Source: Tradingview, Stone X

To summarize, after the NASDAQ 100 pulled back to the 61.8% Fibonacci level from the pandemic lows to the all-time highs, price bounced and is currently consolidating.  The current level of 12,500 is near:

  1. The 38.2% Fibonacci retracement level from the all-time highs to the October 2022 lows on the weekly timeframe
  2. The 50% retracement level from the high of March 29th, 2022, to the low of October 2022 on the daily timeframe
  3. The 61.8% Fibonacci retracement level from the August 16th, 2022, highs to the low of October 2022 on the 240-minute timeframe.

In addition, the current consolidation is a bullish flag pattern with a target near 14462.57.  If price does move higher, watch for resistance at 12853 (50% retracement on the daily and top of the flag), 13422 (the 61.8% Fibonacci retracement on the daily), 13602 (the 50% retracement on the weekly), and 14349 (the 61.8% Fibonacci retracement on the weekly).  Support below is at the 200 Day Moving Average at 11927 and the 50 Day Moving Average at 11634, just ahead of the long-term trendline near 11345.

The NASDAQ 100 is currently trading at key levels.  Price has formed a flag pattern, which is bullish for NDQ.  If price can break above near-term levels, the NASDAQ 100 will have an easier time reaching its target.

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.

© FOREX.COM 2024