Nasdaq 100, Dow Jones, DAX 30 Forecasts for the Week Ahead
Nasdaq 100, Dow Jones, DAX 30 Forecasts: Bearish
- The Nasdaq 100 broke down last week after falling through multiple levels of support
- The Dow Jones established a lower-low after slipping below the September trough
- The DAX 30 was eviscerated and will look to regain its footing after plummeting more than 1,000 points
Nasdaq 100 Technical Forecast
Stocks suffered their worst monthly performance since March after selling pressures picked up in the last week of October. The shift in risk appetite saw the Nasdaq 100 and Dow Jones plummet beneath key technical levels. While stocks closed off their lows on Friday, the damage dealt to the technical formations has been dealt which may leave them vulnerable to further losses in the week ahead.
Nasdaq 100 Price Chart: 4 – Hour Time Frame (September 2020 – November 2020)
That being said, the Nasdaq 100 remains the best performer of the three major US indices. As a result, the tech-heavy index resides above its September lows of 10,676. Should price fall beneath 10,676, it would seriously undermine the technical formation as it would establish a lower-low for the index, compounding the lower-high from mid-October.
Consequently, holding above 10,676 may be key if the Nasdaq is to stave off further losses. On an intraday basis, the 10,950 to 10,920 area may provide some buoyancy before secondary support can be tested.
Dow Jones Technical Forecast
Unlike the Nasdaq 100 which has been a beacon of strength, the Dow Jones remains a laggard amongst the US indices and this has been evidenced most recently by a breach of the September low. Further still, last week’s losses saw the Industrial Average slip dangerously close to the 200-day moving average around 25,775. Coinciding with two swing lows from July, the 26,000 to 25,775 area may be an early zone of potential support.
Dow Jones Price Chart: 4 – Hour Time Frame (June 2020 – November 2020)
Beyond that, support becomes harder to identify. Potential areas of buoyancy may reside slightly beneath 25,000 which aligns with various swing-highs and swing-lows from April to July. Either way, the Dow posted a lower high and a lower low in October which is a worrisome sign going forward.
While September’s losses were initially perceived as a period of consolidation before a longer-term uptrend, October offered another view, hinting that September may have been an early sign of a deeper contraction.
DAX 30Technical Forecast
The DAX 30 is no different. While the fundamental forces at play can vary across the US and European indices, the damage dealt to the technical landscape of the German equity index last week was arguably worse than that seen on the Nasdaq and Dow Jones. Suffice it to say, the DAX 30 was left grasping for assistance from any and all support last week after it was hamstrung on Monday.
DAX 30 Price Chart: 4 – Hour Time Frame (April 2020 – November 2020)
Following an absolute freefall, the German index regained its footing around 11,340. The level aligns with the April peak and should act as initial support in the event of further bearishness next week. Subsequent support may reside around the Fibonacci level at 10,900.
To the topside, the Fibonacci level around 11,585 may offer influence – either bullish or bearish since it is so close to the current trading price – next week. Regardless, the DAX 30 will likely require consolidation before a continuation in either direction can be established following the drastic decline last week. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.
--Written by Peter Hanks, Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.