Nasdaq
The US-China tensions over Beijing’s proposed National Security Law is sparking off a new round of risk-off sentiment, causing a selloff in global markets. Among the US markets, the Nasdaq 100 still hangs on to gains despite the Dow shedding 175 points as at the time of writing.
The Nasdaq 100 is still being propelled by some positive earnings news, most notably that of Nvidia which has rallied 2.54% on an upbeat earnings result. Apple and Microsoft are trading flat, but Moderna received a boost from optimistic comments about its coronavirus vaccine candidate by Dr Anthony Fauci, head of the National Institute of Allergy and Infectious Disease. Moderna is presently up 1.15% and had been up by as much as 4% in premarket trading.
The Nasdaq 100 remains under pressure after yesterday’s bearish close, even as traders start to seek safe-haven assets due to the unfolding situation with China.
Download our Q2 Market Global Market Outlook
Price action continues to trade within the ascending channel. After touching off the upper border of this channel, price retreated on the back of the growing US-China tensions. Early trading on the Nasdaq 100 futures extended these losses today towards the 9264.4 support line, with a bounce that has turned the daily candle into a Doji.
However, resumption of bearish pressure could force a retest of the 9264.4 support. If it gives way, expect the Nasdaq 100 to cascade downwards towards 9167.4 and possibly 9092.3, where the lower border of the channel may help in reinforcing the support of that price level. A breakdown of this border opens the door towards 8945.7 and possibly 8691.0.
Conversely, if 9264.4 can resist the downward pressure and re-initiate a bounce which is strong enough, then we may see a retest of 9452.0. A break of this level then opens the door towards 9626.4, which is within touching distance of the 2020 highs.