Nasdaq 100 futures (NQ)

Nasdaq 100 Index Futures (NQ) Facing Resistance at 12000.00

  • Dramatic pullbacks in stocks show investors maintaining bearish sentiments.
  • Poor performance in tech stocks is keeping the index primarily flat.
  • Investors are waiting to see US GDP data for Q1 amid rising inflation.

The Nasdaq 100 index futures (NQ) had a quiet session yesterday and closed higher, gaining 1.5%. Thursday morning saw stock futures primarily flat after a disappointing update from Nvidia. The chipmaker Nvidia’s shares lost about 7% in extended trading after delivering weaker than expected guidance for the second quarter. The CFO also said the company would slowly be hiring.

Investors are still looking out for the impact of rising inflation and poor growth, which have caused dramatic pullbacks in major stocks, especially after earnings reports. There was little to no surprise from the FOMC minutes released yesterday, as the Fed remains hawkish. Therefore, the index did not experience much volatility and is still trading around 12,000.

The minutes stated that most participants judged a 50-bps increase in the target range appropriate for the next couple of meetings. It also stated that they might adopt a restrictive policy stance depending on the economic outlook. As rates rise, tech stocks with higher valuations will come under a lot of pressure, meaning that the bear market could persist.

Some investors believe that the current re-rating has been overdone and that the Fed will not need to tighten monetary policy as much as the markets expect.

Later in the day, investors will be looking at initial jobless claims in the US and GDP for Q1 to see how the economy is faring amid rising inflation. These releases could see investors responding and possibly moving the index.

Nasdaq 100 index (NQ) futures technical forecast:

Nasdaq 100 index (NQ) futures 4-hour chart
Nasdaq 100 index (NQ) futures 4-hour chart

The 4-hour chart shows a bullish divergence in the RSI, which could mean the return of bullish momentum. The price is currently experiencing resistance from the 30-SMA and the critical level of 12000.00. This move would see the RSI return to the oversold region below 30. A momentum candle after the current consolidation will determine the chosen side.

The long-awaited bullish market will only come back if we can see prices breaking and staying above the 30-SMA and RSI going above the 70 levels.