Nasdaq 100 Futures Are Up, But Coronavirus Headwinds Remain

Summary:
• The Nasdaq 100 futures are trading higher today as it attempts to reclaim yesterday's losses, but significant coronavirus-induced headwinds still remain.

The Nasdaq 100 index is pushing higher on the day as it attempts to reclaim yesterday’s losses. However, with the number of coronavirus cases in the US topping 400,000, the upsurge in the Nasdaq 100 may face some significant headwinds. Losses on lesser-known stocks on the Nasdaq 100 are countering gains on some of the better-known ones. 

The Nasdaq 100 is up by 1.67% on the day, led by soft gains from Microsoft and Amazon. However, this is being countered by losses on Tesla after the company announced pay cuts for all salaried workers using a sliding scale. Senior employees would see a 30% pay cut, while mid-level and other workers would see 20% and 10% of their salaries slashed. 

Away from coronavirus news, Sage Therapeutics, a Nasdaq 100 listed biotech stock, is taking some headline attention after it cut more than half of its workforce following the failure of the Phase 3 trial of its antidepressant candidate, Zuranolone. 

The Nasdaq 100 is presently testing resistance at the 8160.2 price level, after being beaten back from that price area yesterday to deliver a moderate loss on the day.

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Technical Outlook for Nasdaq 100

The Nasdaq 100 is finding the 8160.2 price level a tough nut to crack. This price level has been tested by all daily candles this week, and so far it is holding firm. The Nasdaq 100 needs to break this price level to the upside for an advance to 8442.5 to materialize. As I indicated in yesterday’s analysis of this index, this advance would complete the C wave in the “W” harmonic pattern towards the point D, which I expect to form at the 8442.5 resistance. Extension of the advance beyond this point would invalidate the expected price reversal at point D, leading to a price advance towards 8691.0 and possibly 9092.3 (highs of March 3-5, 2020). 

On the flip side, a reversal from 8160.2 opens the door towards the 8051.5 previous resistance that now acts as a support level. Below this area, 7508.9 and 7241.2 remain possible support targets. The same outlook also exists if prices advance to 8442.5 and reverse from that resistance level, completing point D in the “W” pattern. The expected leg down from point D would then be seen as a continuation of the downtrend which only saw an upside pullback with the “W” pattern.