Yesterday, Nasdaq 100 was hit by heavy selling following the reports on tech restrictions. The index tumbled below the mid-term index breaking its mid-term upwards moving trendline, drawn from the lows of the 25th of April, which in our view, turned the short-term outlook to negative.
Yesterday, the index found support at around the 6975 area, from which it bounced back up and closed just a few points below the 7040 level. Today, we are seeing that the cash index is currently trading slightly above yesterday’s close, which could be consider as a corrective move. There is potential for Nasdaq 100 to make a move towards the 7075 zone, from which it could reverse back down and aim for the aforementioned low at around 6975. A break below that level could trigger some more selling and the price could drop to 6885. If that area is not able to withhold, then the next potential area of support to monitor could be the 6823 level, marked by the low of 23rd of May.
On the upside, if Nasdaq 100 breaks the 7075 area and continues to head higher, we could then start considering a touch of the 7135 level, which could act as a strong resistance, because in the recent past, it acted as good support level. If the buying continues and the bulls start feeling confident, we could end up seeing the index moving to test from underneath the previously mentioned upwards moving trendline.
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