Nasdaq 100: Fear & Greed Index Shows Return of Greedy Sentiment

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Written By: Eno Eteng (MSTA)

May 19, 2020, 17:16 BST 17:16

Summary:

The Nasdaq 100 continues to rise in defiance of the previous resistance levels, sending the Fear and Greed index into Greed mode on public participation.

The Nasdaq 100 is now close to its pre-coronavirus 2020 highs after pushing above a key resistance level. Investors are also cheering aspects of the speech by US Fed Chair Powell in which he said that the Fed is working towards ensuring funding for all businesses that cannot access credit under the current programs.

But what is happening as far as the CNN Money Fear and Greed Index is concerned? The latest snapshot from the Fear and Greed Index shows that the index is now in the neutral zone with a score of 52, which indicates a tilt from the Fear side of the index towards the Greed side of things. This marks a spike in public participation, and also coincides with the period where the market has started to approach its 2020 highs.

The Nasdaq 100 is currently trading at 9397.4, or 0.64% higher on the day in a mixed day of trading which has seen the Dow shed 200 points as at the time of writing.

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Technical Outlook for Nasdaq 100

All that the Nasdaq 100 needs to confirm a breakout of the 9264.4 price level is for today’s candle to follow the example of yesterday’s daily candle to close above that price level. This breakout would open the door towards the 9452.0 price level and give the Nasdaq 100 a chance at aiming to recover the Feb 2020 highs. This move also invalidates the harmonic pattern’s potential reversal at point D.

Price action continues within the context of the ascending channel, and a break of 9452.0 clears the way towards the attainment of the 9626 price level (12 February and 21 February highs). This price level also coincides with the upper border of the channel and therefore looks like the next logical target if the Nasdaq 100 can take out 9452.0.

On the flip side, previous resistance-turned-support levels at 9264.4, 9167.4 and 9092.3 remain potential downside targets if investors resume the selloff of the Nasdaq 100. 9092.3 may intersect the lower channel border and may serve as price support for reference in the next week or two, with a breakdown of the channel then offering up 8945.7 as another downside target.

Written By: Eno Eteng (MSTA)

Eno is a certified financial technician and member of the UK Society of Technical Analysts. He loves to trade and write about stocks, Forex, and CFDs. Since 2009, he has consulted several financial companies as a trader and strategy developer. His work can be seen on several forex blogs and trading educational websites.