Trade Watchlist: NAS100 Short-term Support Ahead?

National Financial Solution > Forex Trading > Trade Watchlist: NAS100 Short-term Support Ahead?


It looks like the saying, “sell in May, go away” has been true so far in U.S. tech stocks, but the market is fast approaching a major support area. Will this draw in the bulls once again?

NAS100 Short-term Support Ahead?

QQQ (Nasdaq 100 ETF) 4-Hour Chart
QQQ (Nasdaq 100 ETF) 4-Hour Chart

Up above, we’ve got the four hour chart of the QQQ’s (Nasdaq 100 ETF), (for those who don’t trade equities, you can get the similar exposure with the Nasdaq-100 E-mini futures or Nasdaq 100 CFD’s), and looks like traders went into sell mode on U.S. tech stocks from the get-go in May, likely on fears of rising inflation and the possibility of increased taxes in the U.S. from the Biden Administration.

Based on the stochastic indicator, this sell-off is reaching short-term oversold levels, a condition that grows more persuasive for potential bulls as the market nears a major support area around the $310 – $310 range. Will buyers jump in her once again to play the longer-term uptrend?

Well, that would depend on the next potential catalyst, which could be tomorrow’s U.S. CPI data. Expectations are for a +0.3% on core consumer inflation and a headline read of 0.2%. If the actual reads come in below expectations, there is a possibility of inflation fears subsiding and bring in back equity buyers.

We’re watching out for that scenario to potentially get long the Nasdaq 100 for a swing play if we see a retest and hold of the $315 previous support area. Bullish reversal candles there raises the odds of drawing in buyers to those levels and keep the market bullish short-term for another shot at the $330 handle within a week or two.

Of course, if the CPI numbers come in fiery hot, a bearish reaction is likely, and a break below $310 could draw in another wave of selling with the $300 handle an easy target before the end of the week.

What do you all think?  Will the latest CPI data get tech stocks moving? Are you bullish or bearish from here? Let me know in the comments section below!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.



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