Nasdaq-100 Index: Excellent opportunities

The NASDAQ-100 Index is a modified capitalization-weighted index of the 100 largest and most active non-financial domestic and international issues listed on the NASDAQ. No security can have more than a 24% weighting. The index was developed with a base value of 125 as of February 1, 1985.

The outlook on all time frames looks rather precarious. The recent recovery move is classified as a regular (albeit fierce) counter trend move within the down trend that commenced mid-March. In other words, sellers hold the edge as long as the strong resistance 6630<>6670 holds out. The recovery ends and a renewed down leg commences once the trigger at 6505 is taken out. Our first price projection then comes in at 6065<>6005.

For the longer term things are quite fragile. A large double top pattern is unfolding with key support at 6400. However, if the near term down trend continues (with a conservative target of 6065), this will automatically mean that the DT is also completed, thus triggering a trend reversal on the weekly charts as well. Levels below 5700 then come into play (6+ month horizon).

Due to the large down side risk and critical resistance and stop levels nearby, we see the Nasdaq-100 index as a prime opportunity for building short-exposure to the broader market. All bets are off with a close above 6670. Also, wait for that short-trigger to get hit!

  • Near term trend: negative
  • Long term trend: neutral (double top)
  • Outlook: potential trend reversal
  • Strategy: short < 6505
  • Support: 6505 / 6400 / 6238 / 6005 / 5690*
  • Resistance: 6630 / 6670 / 6828+
  • Outlook cancelled/neutralized above 6670

420-minute intraday chart Nasdaq-100 Index