Nasdaq 100 forecast:
- Nasdaq The 100 traded lower on Monday, extending losses from the previous week and slipping more than 1% as bullish sentiment continues to wane.
- Despite the recent downturn, the technology index is up more than 35% this year
- This article discusses the technical levels of the NASDAQ 100 that are worth watching in the coming days
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The Nasdaq 100 fell on Monday, extending losses from the previous week, weighed down by a sell-off in the massive cap space. For context, Alphabet, Tesla, and Nvidia suffered a deep setback as bullish sentiment continued to subside, hurting companies that had benefited from the “artificial intelligence” craze over the past few months.
In early afternoon trading, the technology index fell about 1.05% to 14,900, reversing the 0.9% gain recorded earlier in the day. Despite the recent decline, the Nasdaq 100 remains the best performer on Wall Street in 2023, up more than 35% since the start of the year, leaving the S&P 500, Dow Jones Industrial and Russell 2000 in the dust by a wide margin. .
Looking ahead, technology stocks may be in for a bumpy ride as reality sets in. However, the cycle of Fed rate hikes, slowing economic activity and declining liquidity should play against risky assets moving into summer, especially if the US central bank sticks to its guidance and delivers additional tightening during the second half of the year as part of its fight against inflation. .
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While the economy has been resilient, it will struggle to stay afloat for much longer if rates remain above 5% for an extended period. Once the impact of more hawkish politics has fully fed through the system, cracks will appear, creating a hostile environment for stocks. At this point, assets that moved away from fundamentals and reached frothy valuations during the 2023 rally will be subject to a deeper downward correction.
From a technical point of view, if the NASDAQ 100 extends its recent slide, initial support appears at 14,800, but more losses could be in store on dips below this area, with the next target for the downside at 14,300, followed by the psychological 14,000 level. , if the retreating buyers come back and trigger a reversal, the overhead resistance is at 15,275 and 15,500 next.
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