Nasdaq100 Index: Dynamic Resistance May Send It Back to 13,000

Summary:

Nasdaq100 remains close to its all-time high, supported by the strong earnings season and the Fed keeping the easy monetary policy.

The Nasdaq100 index has no been able to capitalize on the strong earnings season posted by the tech companies. Moreover, the Fed’s dovish tone did not materialize in a new move higher, as the index remains under pressure against dynamic resistance.

Yet, traders should not get carried away. As long as the index remains in the rising channel, the price action is bullish, and any short seller is a contrarian trader.

As such, the 14,000 level acts as pivotal in the days ahead. Still, one may wonder – how come the stock market did not continue its rally on the uber-dovish message from the Fed yesterday?

The Fed signaled it has no intentions of tapering the asset purchases despite U.S. growth expectations starting to look really high when compared to peers. Also, inflation expectations are as high as they were back in the day when Ben Bernanke signaled the taper tantrum in the aftermath of the 2008-2009 Great Financial Crisis.

Nasdaq100 Technical Analysis

The technical picture reveals a bullish market, sitting close to its all-time high. Shorting such a market against easy monetary policy and a weak dollar makes no sense.

Therefore, bears may want to wait first for proof of life before going short. Such proof would be a move through the middle range of the rising channel and targeting the apex of the previous triangle. While the risk-reward ratio is not that appealing, it is the most bears can do under the current bullish conditions.