Nasdaq 100 Trades Higher, Targets Recovery Beyond 11,500

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Written By: Eno Eteng (MSTA)
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    Summary:
  • US Dallas Fed Manufacturing Index expands further, but can it help the Nasdaq 100 index to attain the 11,500 price level?

The Nasdaq 100 is trading higher on the day as the Dallas Fed’s survey revealed that the manufacturing activity in Texas is recovering. Data released today by the Federal Reserve Bank of Dallas showed a more robust pace of expansion of the economic activity in Texas’ manufacturing sector. 

The General Business Activity Index of the Dallas Fed’s Manufacturing Outlook Survey rose from 8.0 in August to 13.6 in September. Production Index climbed from 13.1 to 22.3 from 13.1, while the Employment Index grew from 10.6 to 14.5. 

The report served to further boost the sentiment on the Nasdaq 100 for the day, which was already bullish from expectations of a stimulus deal and positive data from China. 

Technical Outlook for Nasdaq 100

The technical outlook for the Nasdaq 100 this Monday comes from the 4-hour chart, where a double bottom pattern is evolving even as the long-term ascending channel remains. The troughs that form the depths lie on the same price level as previous lows of July 22, July 31, as well as a prior high seen on July 27. The price candles are currently testing the neckline, at the 11271.2 price level (August 6 high) where previous role-reversed lows on August 14, September 4 and September 14.

A breakout completes the pattern and puts the September 8/10 highs of 11567.6 as the potential target. This price level fulfils the price projection from the breakout point, which corresponds to the depth of the troughs that make up the potential double bottoms. 11794.1 forms a short-term target beyond this point. 

On the flip side, rejection at the neckline targets 11262.9 (September 18 high). Further declines send the price towards 10866.5, which negates the double bottom pattern. 

Nasdaq 100 Daily Chart

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.

Published by
Written By: Eno Eteng (MSTA)