US stock forecast:
- Nasdaq 100 slides on Tuesday after failing to support bullish momentum from previous week
- The technology index fell 1.65% in May after falling 13.37% in April
- This article discusses the main technical levels to follow in the Nasdaq 100 over the next few days
The Nasdaq 100 was subordinated on Tuesday and was unable to extend its gains before Memorial Day, falling 0.31% to 12,642 per session despite a 4% rise in Amazon’s share price. With the rollback the technology benchmark fell 1.65% in May after falling 13.37% in April, although monthly figures would have been worse had it not been for last week’s strong bullish reversal, which brought the index up nearly 10% from lows 2022.
Despite rise at the end of the month, technology stocks will find it difficult to recover on a sustainable basis as price pressures in the economy remain strong. Although inflation is likely to peak in the first quarter, it will fight significantly and convincingly in the coming months due to rising energy costs, not allowing the Fed to deviate from the tightening course.
After the decision of the European Union on to ban the import of Russian oil, oil, which today briefly reached a two-month high, must remain biased up before the peak of the driving and travel season amid extreme market congestion. This situation will prevent any significant improvement on the inflation front, which will lead to politicians maintaining a hawkish bias in the near future.
FOMC Eligible voter Christopher Waller was the first to raise the hawk this month, showing that he would support raising interest rates in 50 bps increments for a few more meetings and that he would not take extravagant marches off the table until inflation move closer to the 2% target. This will be a much more aggressive cycle of normalization than the one currently being assessed. Against this background, the yield on the US Treasury may soon end the downward correction that began three weeks ago, and resume its growth, which will further affect the valuation of shares.
Looking ahead, the week is full key economic data this will give traders the opportunity to assess the state of the economy, but the focus is likely to be the May reports on wages in non-agricultural sectors and the ISM survey (manufacturing and services PMI). If we see a sharp slowdown in the economy, fears of a recession will intensify, undermining risky assets. On the other hand, if the data cools but the magnitude of the slowdown is not extreme, sentiment could stabilize, giving the Nasdaq 100 some room to continue recovering, but any growth should be limited to the various headwinds hitting the economy.
NASDAQ 100 TECHNICAL ANALYSIS
Despite a rebound of nearly 10% from 2022 lows in recent days, the Nasdaq 100 remains stuck in a bear market, although sentiment seems to be improving, a situation that could pave the way for more growth in the coming days. Saying that if the index manages to resume its recovery, the initial resistance is around the psychological level of 13,000, followed by 13,505, an area where the 50-day moving average converges with a 38.2% Fibonacci rollback on the 2021 sell-off. 2022 . On the other hand, if sellers return to the fading of the recent rise and the price turns lower, technical support will be at 12,600 and then 12,250.
NASDAQ 100 TECHNICAL DIAGRAM