Home Sports Nasdaq 100 Pares strong gains overnight ahead of key earnings

Nasdaq 100 Pares strong gains overnight ahead of key earnings


Nasdaq 100 – Talking Points

  • Nasdaq 100 eases from previous highs after strong rally
  • Netflix’s results come into focus as tech earnings begin
  • Short squeeze or active rally? Only time will tell

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Stocks gave back much of the overnight gains as market volatility continues to remain high. Nasdaq 100 futures rose about 9% from last Thursday’s intraday low, reaching today’s premarket peak of 11,431.75. Markets continue to fluctuate as we enter corporate earnings season. Bank earnings are largely impressive, setting tech gains in the coming weeks. Highly traded tech stocks have been decimated this year by a sharp rise in interest rates, but there could be a respite if earnings show a rosy picture.

Market participants will likely be waiting for Netflix earnings, which are scheduled after the closing bell. Subscriber growth will, as always, be under the market’s microscope, while subscription comments, which include advertising, will also be top of mind. Tech companies have started to cut back after an impressive 2-year run during the Covid-19 pandemic, with many cutting staff and cutting capital spending as fears of a recession mount. Weak results and/or guidance could send the Nasdaq 100 lower over the next few sessions, reversing this strong rally from the lows.

1-Hour Nasdaq 100 Futures Chart

The chart is created using TradingView

After a sharp rally from the 10484 area on Thursday, NQ staged another strong rally during the overnight session. The price briefly traded as high as 11,400 before cooling off after the New York open. Overnight gains cooled sharply as sellers pushed the price below 11100. Since the session lows were marked, the price has rallied more than 1% to the 11200 zone ahead of key earnings after the bell.

NQ looks set to benefit from a lighter-than-usual US economic calendar with little data to offer a “scare” for stocks. It remains to be seen if this rally will continue or if it is just short covering and hedging that will come off the books after last week’s CPI print. If the uptrend line support continues, the NQ could advance to the 11700 area, which marks a monthly high. If FAANG earnings disappoint, it may only be a matter of sessions before they print new year-to-date lows. Any strong move to the downside could see pre-COVID-19 highs around 9763.

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— Posted by Brendan Fagan

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