The Nasdaq 100 has given back some of the gains made this morning, as the markets await the decision of the US Senate on the $2trillion stimulus package being proposed to help individuals, small business and large corporations.
The Nasdaq 100 initially posted gains after the Fed announced a massive expansion of its asset purchase program, but this has proven to be a knee jerk market response. The wait for the stimulus bill seems to be dictating market prices at the moment, with the Nasdaq 100 now trading at 6881.4, just off intraday lows of 6635.0.
Traders are looking for more substantive action from the US Senate on President Trump’s proposed stimulus package. Passage could allow the Nasdaq to extend its gains and help it recover some of last week’s massive losses.
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The Nasdaq 100 index is trading within a descending channel, whose lower border has touched off the 28 January 2019 support at 6615. If the Nasdaq 100 can extend the gains of the day within the context of this channel, then we can expect the price move to touch off the upper border. However, such a move has to break two resistance levels at 6904.0 (cluster of last week’s lows) and 7241.2 to be able to achieve this. The upper channel border will intersect the 28 August/2 October 2019 lows at 7508.9 in the future. Therefore, a break of this price level opens the door for further upside towards 7834.6 and 8015.5.
On the flip side, further selling on the Nasdaq brings 6403.8 into focus, but this move will require a breakdown of the current support at 6615.4. Further support lies at 6134.5, and this level could become relevant if 6403.8 fails to hold off sellers.