NASDAQ Analysis: Will NVIDIA Drive A Correction?

As the US trading session closed, the NASDAQ reached a key support level at $19,490.42, last seen on June 13-14. Over the past five days, the index experienced its strongest bearish impulse wave since May, forming a full correction. However, since hitting this support level, the price has quickly rebounded, and this morning, the NASDAQ trades 0.50% higher. The question remains: will the price continue to rise when the US session opens?

The recent decline is mainly attributed to the drop in NVIDIA stocks and other influential stocks. NVIDIA fell by 6.68%, and 72% of the most influential stocks depreciated. Analysts suggest this was due to insider sales, geopolitical tensions, and the expiry of options. Despite this, many economists believe that as long as earnings remain strong and the economy avoids a recession, buyers will re-enter at a lower price. The key question is whether this support level will hold.

Globally, the stock market shows signs of pressure, especially in the EU and UK markets. The DAX is down 1.07%, the French CAC 0.69%, the Euro Stoxx 50 0.52%, and the FTSE100 0.24%. In contrast, the main US indices are correcting upwards, with 70% of NASDAQ’s most influential stocks trading higher in pre-trading hours. If this trend continues after the market opens, a potential correction could be on the horizon.

In this morning’s Asian and European sessions, NVIDIA is the best-performing stock, up 2.33%, while Ross Stores Inc is the worst-performing, though it only holds a weight of 0.34%. Investors are now awaiting the CB Consumer Confidence and Richmond Manufacturing Index reports. If these data points exceed expectations, they could support the stock market, which has been impacted by a lower risk appetite.

For the NASDAQ to generate buy signals, the price must stay above $19,622.62 in the near term. For a longer-term rise, investors will look for the price to exceed the 75-Bar EMA and 100-Bar SMA on the 2-hour chart. This has created a range between $19,712.53 and $19,782.35. It is also likely within this range that the RSI will rise above the 50.00 mark (currently at 39.53).

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Michalis Efthymiou
HFM’s Market Analyst
Michalis Efthymiou brings over 9 years of extensive experience in the financial services industry across the United Kingdom and Europe. Initially serving as a financial advisor in London for 5 years, he has transitioned into the field of market analysis over the past 4 years.
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