Nasdaq 100, Russell 2000 Forecasts: bullish
- Nasdaq 100 transactions near the upper limit of the ascending channel, which comes from 11 months
- Russell 2000 suffered a major technical breakdown in early July, but remains above a significant technical level
Nasdaq 100 Technical Forecast
The Nasdaq 100 endured tight pricing last week as revenue from major technology companies and a FOMC the interest rate decision helped to increase market volatility. As much of the risk of the planned events is behind us, the Nasdaq 100 will be able to assess its position and continue on the trajectory that has risen from the low point of the pandemic. With this in mind, the resistance to the upper side is limited.
Nasdaq 100 Price Chart: Daily Schedule (September 2020 – August 2021)
Trading the level of advertising only shyly, the Nasdaq 100 has few technical levels that work with overheads, which can allow profits to continue relatively easily. One obstacle to consider is the growing trend line in September 2020 and February 2021. On the other hand, the tech-heavy index has a lot of support to work with when the appetite may be sour.
In particular, the 50-day moving average of the index may be around 14,500. Although brokerage levels do exist, an effective “line in the sand” at this stage can be found in the series of swings from September 2020. The resulting barrier indicates the lower side of the ascending channel and the wider ascending trend.
Russell 2000 technical forecast
Although the Nasdaq 100 is rising to new heights, Russell 2000 is trading just above its 200-day moving average and has made little progress since early February 2021. Nevertheless, the outlook for the small capital index is encouraging. Recent weakness may have allowed for healthy consolidation, and the index, which is backed by a major headwind, may try its all-time high of 2367.
Russell 2000 Price Chart: Daily Schedule (February 2020 – August 2021)
Such an attempt would require the index to break the 50-day moving average and keep its trajectory above the March 2020 upward trend. Although the recent breakdown represented a significant decline in the technical landscape, there is no evidence of a broader downward trend at this stage, and after a break below 2100 the index may remain in a strong position in the future. Meanwhile, follow @PeterHanksFXFor Twitter updates and analysis.
– Written by Peter Hanks, Strategist For DailyFX.com