The Nasdaq100 Futures (CME: NQ) have staged a remarkable recovery, marking a pivotal turnaround from the substantial losses incurred in the first week of the year.
This resurgence was not a mere rebound but a robust rally, with the index futures securing five consecutive days of gains and surging by an impressive 3.09% last week. This noteworthy ascent effectively nullified a prior 3.31% loss, showcasing the resilience of the tech-heavy index.
The tech sector stalwarts, especially chip stocks, fueled this resurgence, spearheading a substantial leap. Notably, Nvidia Corporation reached new heights, buoyed by bullish sentiment following its announcement of cutting-edge AI processors and software. As market watchers pivot to the upcoming economic calendar, the focus now shifts to U.S. retail sales and jobless claims, critical indicators that could sway perceptions about the strength of the consumer sector and labour market, influencing expectations of potential rate cuts as soon as March.
Technical
The Nasdaq100 Futures embarked on a tumultuous journey at the onset of 2024, breaching the 100-day moving average in a stark signal of a significant downturn.
Amid overbought conditions, a resistance level materialized at 17165.25, marking a pivotal moment. The plunge descended beneath critical Fibonacci Retracement levels, finding a lifeline at the 61.80% Golden Ratio, preventing a substantial move towards a key support level at 15792.50, established during the December 2023 rally.
A reversal ensued at the Golden Ratio, where oversold RSI conditions paved the way for bullish momentum, signalling a shift. The crossover above the 100-day moving average marked the beginning of a potential uptrend. As traders navigate this landscape, the potential retest of the 17165.25 level looms if sustained bullish momentum prevails, while a downside scenario could hinge on the 50% level, serving as a critical point of interest if bearish pressures intensify.
Summary
Nasdaq100 Futures (CME: NQ) showcased resilience, bouncing back from early 2024 losses with a robust 3.09% surge last week, offsetting a prior 3.31% decline. Tech stalwarts, especially Nvidia Corporation, propelled the index’s recovery. Technical analysis reveals a pivotal reversal from oversold conditions at the 61.80% Golden Ratio, marking a potential uptrend. Traders will likely eye critical levels for further market cues.
Sources: CME, Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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