Nasdaq 100 Analysis: Early November Movements Raise Concerns

Nasdaq 100 Analysis: Early November Movements Raise Concerns

As the chart shows, the Nasdaq 100 index gained around 6% in October, supported by several key factors:

→ The meeting between US President Donald Trump and Chinese leader Xi Jinping, which helped ease tensions in trade relations between the world’s two largest economies.
→ A 0.25% rate cut by the Federal Reserve.
→ Positive earnings from major tech companies, including a strong report from Alphabet (GOOGL).

However, the market’s behaviour in early November is cause for concern — on the morning of 4 November, the stock index fell to its lowest level in a week. Bearish sentiment is being fuelled by:
→ uncertainty over the timing of the end of the government shutdown;
→ a weaker-than-expected ISM Manufacturing PMI report, which may reflect the impact of Trump’s tariffs on US industry.

Technical Analysis of the Nasdaq 100 Chart

Analysing the hourly chart of the Nasdaq 100 on 30 October, we:

→ confirmed the relevance of the upward channel (shown in blue), noting that the upper boundary was showing signs of resistance;
→ drew a steeper trajectory consisting of three orange lines;
→ suggested a profit-taking scenario, in which bears would attempt to push the Nasdaq 100 index down towards the median line of the blue channel.

This scenario has since materialised, as:
→ the median line has repeatedly acted as support (highlighted in blue);
→ the breakout level of the orange lines at 26,120 has turned into a resistance zone.

At present, the Nasdaq 100 index is trading in the lower half of the channel, indicating that the bullish momentum from late October has faded. Bulls might find support near the gap area, reinforced by the lower boundary of the blue channel.

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