- Summary:
- A possible reopening of the US economy is driving the Nasdaq 100 and the Fear and Greed index higher, even as hopes of new coronavirus treatments emerge.
The Nasdaq 100 continues its advance in early Friday trading after the US President Donald Trump unveiled plans to reopen the US economy following coronavirus-induced shutdowns and lockdowns. Furthermore, new coronavirus treatment hopes are also fuelling the advance of the Nasdaq 100, with several healthcare stocks experiencing appreciation. These events are also reflecting on the CNN Fear and Greed Index, which has moved 8 points from Tuesday’s value to 44.
Stocks of Gilead Sciences are leading the charge on the Nasdaq 100 after the company announced that it had seen astounding results in coronavirus patients being treated with its experimental drug named remdesivir. The stock was up by more than 10% at a point but is now 8.35% higher as the market tries to cover the opening gap seen on the chart of that stock. Copart Inc, another Nasdaq 100 listed stock, is up 4.5%. Travel stocks Expedia and American Airlines are also on the gainers” chart at the moment, as are Cintas, Fiserv and Starbucks which are all above 4% on the day.
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Technical Outlook for Nasdaq 100
This week marks the third week in a row that the unemployment claims figures have run into the millions, indicating erosion of all gains made in the employment sector by the Trump administration. Under severe pressure to get things going in an election year, the US government has released guidelines under which states could decide to ease the coronavirus restrictions in their territories to allow businesses to work.
Investors also want to see the economy back on stream. The US economy is a melting pot of business interests from around the world, and that is why investor interest in the US markets is picking up. Investors are gradually dropping off the fear factor (as shown by the rise in the Fear and Greed Index).
Today’s session opened with an upside gap, and despite the gap covering being seen in the market, sentiment remains bullish. The daily candle of yesterday was able to close above the 8691.0 resistance. If today’s candle closes above this level, this would confirm the breakout and open the doors for a possible advance towards 8945.7 (today’s intraday resistance) and possibly 9092.3. We also have 9167.4 and 9264.4 as possible price targets if price advance remains strong.
On the flip side, if the gap covering move extends below the 8691.0 resistance level and closes below it, this postpones the breakout. Downside targets following a price rejection at this area have 8442.5 and 8160.2 as immediate targets. 8015.5 continues to remain a possible support target whose importance as a potential bounce area continues to wane with further advance of the Nasdaq 100.