Nvidia’s impressive earnings report, released after the market close yesterday, sent shockwaves through the tech sector. The AI and semiconductor giant crushed analyst expectations, boasting a 265% year-over-year jump in revenue and projecting continued growth in 2025 and beyond. This has fueled optimism in the technology-heavy Nasdaq 100 Index (CME: NQ), pushing futures contracts higher and undoing recent losses.
However, cautious signals from the Federal Open Market Committee (FOMC) minutes and Fed member pronouncements tempered the rally. While rate cuts are anticipated later in the year, the Fed remains focused on containing inflation, potentially limiting the upside for high-growth stocks like those in the Nasdaq 100.
Technical Analysis:
On the 4-hour chart, the index is currently at 17,802.25, with a slight upward trend following the Nvidia-induced recovery. The price action recently broke above the 20-SMA (green line) and 100-SMA (orange line), currently trading around the 50-SMA (blue line). Notably, the 20-SMA recently crossed below the 50-SMA and 100-SMA, indicating a potential downtrend reversal. The RSI (56.80) is sharply rising and recently broke above the 50.00 level, suggesting momentum towards the upside.
With the recent break above key SMAs, a potential for a push high could exist, with the 18,000.00 price level likely to act as a significant level in the short term. Short-term trading opportunities towards the 18,200.00 price level could exist should the price action sustain a break above the 18,000.00 price level.
However, a beak below the SMAs would leave the 17,568.00 price level as the level of interest lower. A break below the 17,568.00 support level would bring the 17,370.00 support level into play in the short term.
Summary
The Nasdaq 100 is riding a wave of optimism propelled by Nvidia’s strong earnings. However, the Fed’s hawkish stance and broader economic uncertainties cast a shadow. Technical analysis suggests a potential for further upside towards 18,000.00, with key support levels at 17,568.00 and 17,370.00.
Sources: TradingView, Trading Economics, Dow Jones Newswire, Reuters, Nvidia, Federal Reserve.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.
