Nasdaq 100 - An opening gap, high anxiety and more downside

Overnight, the Nasdaq continuous futures opened 1.6% lower. As a result, NQ1! erased its gains from the prior trading session; this development hints at elevated anxiety among market participants, who are eager to take profits off the table as soon as possible. The opening gap pushes the odds to the downside for the stock market. Additionally, we foresee the same pressure from higher interest rates in the U.S. and economic tightening around the globe. Therefore, we stay adamant in our bearish stance on the Nasdaq 100 index. Accordingly, we would like to set new price targets for NQ1! to 11 750 USD and 11 500 USD.

Illustration 1.01

Illustration 1.01 shows the opening gap on NQ1!.

Technical analysis - daily time frame
RSI, MACD, and Stochastic are bearish. The same applies to DM+ and DM–. The ADX shows no signs of weakening, which suggests that the bearish trend is still present and strong. Overall, the daily time frame remains bearish for NQ1!.

Illustration 1.02

The picture above shows seven weeks of selling in the Nasdaq 100 index, which leaves many traders asking whether the bear market rally will be seen on the horizon soon. We start to notice the first oversold signs on the weekly time frame, which raises caution.

Technical analysis - weekly time frame
RSI reached oversold condition. Stochastic, MACD, DM+, and DM- are all bearish. The ADX continues to increase. Overall, the weekly time frame remains bearish.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

Trade closed: target reached:

Our price target of 11 750 USD was reached.

Comment:

The breakout above the resistance could suggest a potential bear market rally. Therefore, we will pay close attention to the sloping resistance. The breakout would force us to abandon our short-term price targets on NQ1! and QQQ.