It’s been a shaky start to the new year, with interest rate anxieties dragging on sentiment and hitting the Nasdaq 100 particularly hard.
The index fell more than 8% over the last week, breaking through key support in the process, which could have led to a much deeper correction. Instead, the index bounced strongly in the final hours of trading on Monday and failed to close below the rising channel.
While a deeper correction could still be in the cards, the false breakout – as it now appears to have been – could signal the end of the panic in tech stocks.
If the index can overcome a few key tests above – potentially aided by earnings season which is about to get under way – it could continue the trend we’ve seen since the lows of March 2020.
The first test is around 15,900-15,922, where prior resistance combines with the 50% Fibonacci retracement level. Above here, around 16,100-16,150 will be interesting, combining the 50/89-day SMA band, with the 61.8 fib and the 55/89 and 200/233-period SMA bands on the 4-hour chart.
A move above here could see the NASDAQ 100 gather pace to the upside.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
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