Nasdaq 100 Resisting Bearish Pressure from Falling Crude Prices

Summary:
• Despite opening lower, the Nasdaq 100 has bounced and appears poised to resist bearish pressure from falling crude oil prices

The Nasdaq 100 futures are pointing to a lower open on the index asset after falling 0.74% on the day as global markets were spooked today by the 38% collapse of crude oil prices on the WTI benchmark. The Nasdaq 100 was also smarting from the announcement from listed stock United Airlines that it would borrow $4.5 billion under the CARES Act, as it announced a pre-tax loss of $2.1billion. 

However, losses on the Nasdaq 100 remain limited when compared to the Dow, which has lost 500 points so far. This is because traders on the Nasdaq 100 have their radar focussed on the earnings reports of listed companies such as Netflix, Intels, IBM and SouthWest. 

Initial losses on the Nasdaq 100 are now being offset by gains on Netflix, which is up more than 13% today in premarket trading. Other gainers include Amazon, Advanced Micro Devices (AMD), Alexion Pharmaceuticals, Gilead Pharmaceuticals, Vertex Pharmaceuticals, Biogen. Tesla, Fox, Micron Technology and American Airlines find themselves on the losers’ chart. 

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Technical Outlook for Nasdaq 100

Price action for the week on the Nasdaq 100 looks set to be dominated by the earnings numbers of big wigs like Netflix, Intel and American Airlines. Also, how badly the Dow is hit by falling oil prices and the accompanying sentiment this will bring to the US markets could also have some form of impact on the Nasdaq 100. 

So far, price action has retreated from the 8945.7 resistance (141.4% Fibonacci extension from wave XA on invalidated butterfly pattern), and this rejection appears to have met support at the 8691.0 price level. A breakdown of this price support targets 8442.5, with the possibility of extension to the previous Fibonacci swing high of 8264.8. The lows of 3 December 2019 and 28 February 2020 at 8160.2 as well as last significant resistance turned support at 8015.5 may become relevant if the Nasdaq 100 falls further. 

On the other hand, a bounce from the 8691.0 support allows the Nasdaq 100 to retest 8945.7, with the possibility of an advance towards 9092.3 and 9264.4 if there is enough upside momentum to break 8945.7. Such momentum could come if positive earnings numbers hit the market as from tomorrow.