Thursday ended the busiest stretch for internet and software companies, with Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), PayPal and Google (NASDAQ:GOOGL) all unveiling results. Although Amazon and Apple gained after hours yesterday, Google slipped, as the firm's profits missed forecasts. There were also declines in Microsoft and PayPal on Wednesday, which weighed on the Nasdaq 100 Index. Combined with the recent risk-off sentiment in equities, the index has seen a retracement of the big gains made in January.
In the daily timeframe, the Nasdaq 100 peaked at 7041 and is testing the 20EMA and 23.6% Fibonacci from the lows in December. A close below 6880 could see further declines to support at 6784. This could be followed by a test of the November trend line, 50MA and 61.8% Fibonacci, which stands at around 6630. A close above 6880 is needed to change the outlook, with a possible bullish move to new highs.
In the 4-hourly timeframe, a head-and-shoulders reversal pattern has formed. 6730 is the full target if the pattern plays out. Following that, support can be found at 6630 as in the daily timeframe. On the flip-side, a reversal and close above the neckline at 6680 would negate the outlook, with a possible move to new highs.
