Two trades to watch: Nasdaq, WTI oil

Screen showing share price of 22,450
Fiona Cincotta
By :  ,  Senior Market Analyst

Nasdaq extends gains with Microsoft, Alphabet earnings due

The Nasdaq close closed 0.9% higher in the previous session, helped along by a 12% jump in Tesla following an order from Hertz for 100,000 EVs.

The US tech heavy index is set to push higher again today. After the close Facebook reported earnings, beating forecasts with EPS at $3.22 vs $3.17 est. on revenue of $29.01 billion. Monthly active users rose 6%. So far the change in iOS privacy policy isn’t being reflected in softer ad spend.

Today more earnings from big names such as Microsoft and Alphabet are due.

Data wise the key focus will be on US consumer confidence which is set to decline to 108.3 from 109.3.

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Where next for the Nasdaq?

The Nasdaq has extended its rebound off 14600 hit October 12, retaking both the 50 & 100 sma. The index trades above a steep rising trendline from  this date.

The price breaking out above resistance at 15500 and the bullish RSI point to further upside to come.

A break above 15700 is needed for fresh all-time highs to be reached.

There are several points of support near term, starting with 15500 the mid-September high.  Break through here could open the door to 15425 the rising trendline resistance, exposing the 50 sma at 15200. A break below this level could negate the near-term uptrend. It would take a move below 14600 for the sellers to gain traction.

Nasdaq chart

US crude oil eases ahead of API stockpile data

WTI crude pulled back from 85.26 a 7 year high reached yesterday and trades mildly under pressure below 84.00.

Broadly speaking fundamentals remain supportive amid strong demand in the US and the ongoing energy crisis. Whilst China’s intervention into the power and coal markets have seen prices cool slightly, global energy prices still remain elevated amid the onset of winter in the northern hemisphere. Goldman Sachs sees oil prices reaching $90 by the end of the year.

Traders look ahead to the release of weekly stockpile data from the API. Crude stockpiles are expected to have risen by 1.7 million.

Traders are also awaiting the outcome of talks between Iran and the West after comments from the US  that talks were at a crucial phase.

Separately, Saudi Arabia’s aim to reach net zero by 2060 could challenge the bulls.

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Where next for WTI oil prices?

The strong rebound from the 61.20 low in late August remains intact. Oil continues to trade within the multi-month ascending channel.

After hitting a 7 year high and the upper band of the rising channel the price has eased lower. The RSI is in over bought territory so a move lower or some consolidation is expected before further gains towards $90.

Meanwhile, support can be seen at 80.70 last week’s low and 79.71 the lower band the rising channel and the 21 sma which could be a tough nut to crack.

WTI oil chart

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