- Summary:
- Despite the worse-than-expected US initial jobless claims data, the Nasdaq 100 continues to inch higher on expectations of a US Congress stimulus.
The Nasdaq 100 is trading higher today even as total US Jobless Claims for the last four weeks top 25 million people. So why is the Nasdaq 100 responding positively to the news even though the 4427K jobless claims filed last week exceeded the market expectations of 4350K?
The reason has to do with the comparison of the numbers. Despite the worse-than-expected number for last week, the number of US initial jobless claims is reducing on a week-to-week basis. Therefore, investors may be seeing this as somewhat of a favourable situation, especially as the US Congress is planning a new stimulus vote and some states seek to follow Georgia’s example of opening their economies by next week.
Nasdaq 100 listed stocks such as Apple, Tesla and Intel are also inching towards possible buy points, even as their earnings are due. Apple is trading 2.88% higher, while Microsoft and Tesla are up by 3.4% and 6.61% respectively.
The Nasdaq 100 is also seeing uplift from the positive results of biotech stocks Eli Lilly and Citrix Systems, which are up by 2.26% and 3.34% respectively.
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Technical Outlook for Nasdaq 100
As indicated in my analysis of the Nasdaq 100 index asset yesterday, today’s candle is now testing the 8691.0 resistance line. A definitive break of the resistance line can only be confirmed by two successive candle penetration closes above this level. If this is achieved, the Nasdaq 100 may then target the 8945.7 resistance. Only a break of 8945.7 (141.4% Fibonacci extension of the XA wave in the invalidated harmonic pattern) and subsequent push towards 9092.3 would produce the higher high needed to confirm the resumption of the uptrend on the Nasdaq 100, if the higher lows of April 2020 are considered as well.
On the flip side, failure to break the 8691.0 or 8945.7 resistance levels is an indication that the uptrend may have stalled. This scenario could then keep the Nasdaq 100 in a range that has 8442.5 as a possible lower barrier. If price retreats from current levels and can find support at 8442.5, then a range trade between 8442.5 and 8691.0/8945.7 could be a potential play in the short-term.
However, if price retreats and breaks below 8442.5, this move then brings 8160.2 and possibly 8015.5 into focus.
The US Congress’s stimulus vote could be the next major trigger for the Nasdaq 100.