NASDAQ 100 Forecast: Index Gives Back Early Gains

Christopher Lewis

If the interest rates continue to fall, that does help these stocks, and they could continue to push to the upside.

The NASDAQ 100 initially rallied during the trading session on Tuesday but gave back the gains in order to show signs of exhaustion. At this point, the market could very well pull back towards the 50-day EMA which is just below the 13,500 level, an area in which I have seen a bit of interest in both buyers and sellers. With that being the case, the market is likely to see a move towards the 14,000 level above which was the all-time high.

On a pullback from here, that 50-day EMA should be important, as a lot of people like taking advantage of it. The 50-day EMA also corresponds to the bottom of the impulsive candlestick from the previous session. Looking down below there then opens up the possibility of the uptrend line being targeted and the 13,000 level. With this being the case, the market is likely to see a lot of interest, as the technology stocks have been trashed recently. If the interest rates continue to fall, that does help these stocks, and they could continue to push to the upside.

To the downside, the uptrend line is something worth paying attention to, because if we do break down below there, then I think it does open up a little bit of negativity, perhaps down to the 200-day EMA initially. It is not until we break down below there that I would be a buyer of puts, as it could give you a bit of an opportunity to pick up some gains, but without the struggle of trying to fight the Federal Reserve and the latest headlines that could have people jumping in. At this point, the market is likely to continue to see a lot of volatility and manipulation, but I have no interest in shorting. With this, I look to find a way to limit my losses more than anything else. At that point, I believe that you would have to take your profits relatively quick, because if the markets do in fact fall apart, it is only a matter of time before the market would probably turn around. Therefore, I would be very cautious about doing that, hence the fact that I would be using options. In general, though, I like the idea of buying dips.

NASDAQ 100 Index

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Sample Dynamic Content Placeholder