The Nasdaq 100 futures (CME: NQ) are gearing up for a third straight week of positive momentum, propelled by the impressive quarterly results from Netflix. The streaming powerhouse exceeded revenue expectations and saw its stock soar by 10.7%, fuelled by its strongest customer growth since the onset of the pandemic. While this news injected optimism into the market, it encountered a slight tempering effect, with the S&P Global Manufacturing PMI surpassing expectations at 50.3, contrary to the anticipated steady figure of 47.9.
Adding to the market dynamics, the Services PMI also edged up to 52.9, surpassing the consensus of 51. This shift raises the possibility of a more hawkish stance regarding the timing of Federal Reserve rate cuts. In the aftermath of its latest earnings report, Tesla experienced a 5.85% contraction in after-hours trading, potentially influencing overall market sentiment.
Yet, the week is far from over, and anticipation is building with significant events on the horizon. The United States is poised to reveal its GDP growth and the crucial PCE Price Index in the final two days, setting the stage for substantial price movements in the days ahead.
Technical
On the daily chart, an ascending channel remains in play, with the price recently pushing through the 161.8% Fibonacci extension from the late-October bottom. While the bulls are firmly on the front foot, the RSI indicates overbought conditions, which could lead to a pullback in the upcoming sessions.
Resistance is established at 17,806.00, a level which previously enforced a retracement as the futures tested the new high. This could be a level of interest as we advance, as it can trigger a pullback once again. However, a breakout at this level could confirm the bullish stance, potentially underpinning the futures’ momentum toward forming new record highs.
However, it could retest the 161.8% Fibonacci extension at 17,193.50 if the price pulls back again. An additional breakdown here could put the dynamic support of the channel at risk, where the 25-SMA (green line) hovers around 17,013.79. If a channel breakdown occurs, the 16,761.00 support could be a potential pivot point to enforce a retracement back to the breakdown level. Otherwise, the price could trickle lower toward the 50-SMA (blue line) near 16,578.85.
Summary
While the Nasdaq 100 futures are on the front foot, pivotal data releases like the GDP and the PCE Price Index due this week hold the potential to enforce a pullback. Resistance at 17,806.00 could be a level of interest to the upside, while a pullback could result in a retest at 17,193.50.
Sources: Koyfin, Tradingview, Reuters
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
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