Nasdaq 100: Key levels to watch every 1,000 points

After just dodging a “bear market” intraday decline of -20% (at least so far) to start the year, the widely-followed Nasdaq 100 index (US Tech 100) has stabilized in choppy trade below 15,000 over the last week.

Fundamentally speaking, the big factor driving the tech-heavy index in recent weeks has been earnings. Looking at just the most heavily-weighted components of the index, we’ve seen earnings reports beating expectations at Apple, Microsoft, Amazon, Alphabet, and Tesla, though these gains were partially offset by big misses from Meta and Netflix. Nvidia, with a 3.9% weighting in the index, is expected to report earnings on Wednesday, February 16^th after the bell.

The other key fundamental driver to watch when trading the Nasdaq 100 is interest rates. As traders price in the potential for more aggressive interest rate hikes from the Federal Reserve, we’ve seen the yield on the benchmark 10-year treasury bond surge from under 1.40% at the start of Christmas week to approach 2.00% this week. As a reminder, rising yields increase the cost of capital for companies and make bonds a (slightly) more compelling alternative for investment funds than equities. While we doubt many traders are directly selling their shares in fast-growing tech behemoths like Apple and Amazon to buy a government bond yielding less than 2%, this shift nonetheless influences flows at the margin.

In any event, the Nasdaq 100 index is trading up by more than 1.5% on the day to regain its 200-day EMA and test the 15,000 area. Moving forward, there are key levels of previous support and resistance to watch roughly every 1,000 points:

16,500: Major resistance near the all-time highs
15,500: Previous-support-turned-resistance from December and January
14,500: Previous support dating back to July, as well as this week’s low
13,700: The year-to-date low

Source: TradingView, StoneX

Short-term traders may want to mark these levels on their charts and use them as levels to frame trades around in the days and weeks to come (e.g. look for sell opportunities if the index rallies to 15,500, or buy if it breaks above, targeting the next level at 16,500, etc). By understanding the key signposts along the way, traders can keep their bearings and stay on track, even amidst market volatility.

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.