- Summary:
- Recovering Chinese PMI data allows the Nasdaq 100 index to pick up steam this Tuesday as it continues its slow recovery from monthly lows.
The Nasdaq 100 index looks set for a higher but muted open as the futures asset is presently 1.2% higher. This move follows that of global markets which were lifted this Tuesday by recovering Chinese PMI data. However, the recovery move remains muted with the coronavirus pandemic still not showing signs of a slowdown. Indeed, as more testing becomes available in the US, the coronavirus case counts could rise sharply. Nasdaq 100 futures are currently trading at 7997.9 as at the time of writing, as the coronavirus outbreak in the US has prompted the lockdown of 30 states.
Speaker of the US House of Reps Nancy Pelosi says a lack of adequate testing remains the most significant problem faced by US authorities. There are fears that numbers could rise with increased screening, which means that the pandemic could yet get worse before things start to change.
The muted upside on the Nasdaq 100 is a reflection of this sentiment, with markets welcoming the $2trillion stimulus rescue package but also mindful of the fact that the pandemic is nowhere near its end.
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Technical Outlook for the Nasdaq 100
The Nasdaq 100’s uptick allows it to stay above the ascending channel and is also challenging the resistance at the 8015.5. The next target for the Nasdaq 100 would be at 8160.2 (4 November and 3 December 2019 lows), if the 8015.5 resistance is surmounted.
On the flip side, failure to break above 8015.5 could provide an opportunity for a pullback with retests the 7834.6 price support, formed by the lows of 19 July and 22 October 2019 among other clusters of lows in 2019. Further pullback brings 7508.9 into the picture, with a good chance of also retesting the upper barrier of the ascending channel on the chart.
Presently, the Nasdaq 100 index would be looking at the critical data for the week, especially Thursday’s Initial Jobless Claims and the Non-Farm Payroll report on Friday.