Nasdaq 100 Index Forecast: Bullish at $19,752 Amid Strong Tech Performance and Fed Uncertainty

The NASDAQ 100 has maintained its upward trend, remaining bullish around the 20,320.25 level and hitting an intra-day high of 20,371.00. This surge has been primarily driven by the strong performance of big technology stocks such as Nvidia, Microsoft, and Apple. These three tech giants alone constitute about 25% of the NASDAQ 100’s market cap.

NASDAQ 100 Price Chart

However, this recent month has seen an accelerated gain of 6.6%, reflecting robust investor confidence in the tech sector. Such strong performance underscores the resilience and growth potential of the tech-driven NASDAQ 100 amidst a dynamic market landscape.

Geopolitical Risks and Political Uncertainty in Europe and Their Impact on NASDAQ 100

As we mentioned above that NASDAQ 100 has been on a strong upward trend, but this positive performance is at risk due to global geopolitical tensions. In the Middle East, escalating conflicts, especially between Israel and Lebanon, have increased investor anxiety. However, the possibility of an “all-out war” between Israel and Hezbollah threatens to cause broader regional instability, which could impact global markets.

Meanwhile, the recent strategic moves by Russia and China, such as forming a defense pact with North Korea and expanding the BRICS trading federation, add further uncertainties. These geopolitical developments create a risk-averse environment, prompting investors to seek safer assets and slowing the NASDAQ 100’s upward trend.

Uncertainty Over Federal Reserve Rate Cuts and Its Impact on NASDAQ 100

On the US front, the Federal Reserve’s decisions on interest rate cuts are an important factor for the NASDAQ 100. It should be noted that the recent US economic data, such as disappointing retail sales and weaker consumer and producer prices, suggest the possibility of an easing monetary policy. However, the Fed has remained cautious.

Currently, market expectations point to a potential rate cut in September, with another one possibly following later in the year. The Fed’s updated projection of only one interest rate cut in 2024, down from the three cuts previously projected, has led to a revival in US Treasury bond yields.

This poses a challenge for the NASDAQ 100, as higher bond yields can attract investors away from stocks, limiting the index’s gains. The uncertainty surrounding the Fed’s actions keeps investors on edge, resulting in a more subdued and range-bound trading environment for the NASDAQ 100.

NASDAQ 100 Price Chart

NASDAQ 100 Price Forecast: Technical Outlook

The Nasdaq 100 Index is currently trading at $19,752.30, showing a modest increase of 0.02%. The 2-hour chart highlights several key price levels that are crucial for determining the index’s next movement. The pivot point, marked at $19,722.13, is a significant level to watch. Immediate resistance is found at $19,836.24, with subsequent resistance levels at $19,979.23 and $20,092.54.

On the downside, immediate support lies at $19,620.41, followed by stronger support at $19,517.89 and $19,409.98. These levels are essential for preventing further declines. The Relative Strength Index (RSI) is currently at 59.90, indicating moderate momentum without signalling overbought or oversold conditions.

The 50-day Exponential Moving Average (EMA) stands at $19,392.98, providing a robust support level. This EMA is a crucial indicator for traders, as it suggests where the price may find support during pullbacks. Overall, the outlook for the Nasdaq 100 Index remains bullish above the pivot point of $19,722.13. However, a break below this level could signal a potential downturn, shifting the market sentiment.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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