Last week, the Nasdaq 100(#NDX) accumulated a return of more than 11%.
The Nasdaq-100 made a strong recovery amid improving positive sentiment. The index recovered from a low on March 15 when it hit 12,941 to end the week at 14,437 on March 18. The index has gained 1,500 points in less than 72 hours.
This sharp rebound in the Nasdaq-100 came after the US Federal Reserve raised its benchmark rate by 25 basis points and then signaled that it expects to raise rates in the remaining six meetings this year.
Although interest rate hikes may weigh on economic growth, Fed Chairman Powell defined the US economy as very strong and able to withstand higher rates. These comments fueled positive sentiment and Wall Street ended the week with strong returns.
On the other hand, the lack of positive news regarding the talks between Russia and Ukraine could weigh on the positive sentiment and a technical correction could occur to limit a further rise in Nasdaq-100.
On the 4-hour chart, we can see that the Nasdaq-100 is trading around 3/8 Murray. This is an area that could offer strong resistance. A consolidation below this level could accelerate the decline of the Nasdaq and the index could find support at the 200 EMA located at 14,095.
The eagle indicator is clearly signaling overbought conditions, hence an imminent bearish move is likely to occur in the next few hours and the price may reach the psychological level of 14,000 points.
Since the beginning of March, the Nasdaq was trading in the area 14,375 and then fell to the support level of 13,125. These levels have turned into a price range and the index is likely to get stuck in this area again in the coming days.
Our trading plan is to sell below 14,375 with targets at 14,095. If bearish pressure prevails and breaks the 21 SMA, we should continue selling with targets at 13,750 (2/8Murray). The eagle indicator supports our bearish strategy.