- Summary:
- Fear and greed index rises, reflecting renewed bids by investors for stocks listed on the Nasdaq 100 and other US markets in response to economic stimulus.
The Nasdaq 100 has risen by 15% from its 2020-low, which has helped the CNN Fear and Greed index to rise from “Extreme fear” levels. However, the gauge is still at a low of 29, which suggests that “Fear” is still dominating the markets, and that we could see the Nasdaq 100 add to its gains.
The Fear and Greed index spans from 0 to 100 and low levels in the index tend to suggest higher prices ahead. The indicator works less well to predict major highs, as a bullish stock market can trend higher for a long time.
As the Fear and Greed index is currently at 29, and the next level of resistance in the index is the 50 to 60 level interval, the Fear and Greed index suggests that we could see higher prices in the weeks ahead. I would also like to point out that the VIX index, also called the “Fear Index,” remains at elevated levels.
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Technical Outlook for Nasdaq 100
The Nasdaq 100 futures asset appears to have shaken off Friday’s losses, as investors digest the details of the $2.2trillion economic rescue package put in place by the US government. This is allowing the active daily candle to challenge the upper border of the ascending channel.
The Nasdaq 100 is trading at 7660.2 as at the time of writing, and flirts with the 7508.9 resistance. There have to be two successive daily candles with penetration closes above 7508.9 to confirm the breakout. This opens the door for the Nasdaq 100 to push towards the 7834.6 price level (previous lows of 18 July and 22 October 2019). Further price recovery could bring 8015.5 and 8160.2 into focus.
On the flip side, failure to breach the 7508.9 price level could reopen the door towards the 7241.2 support, with the 3 June 2019 lows at 6904.0 and 6615.4 presenting themselves as potential support targets.