Nasdaq 100 Price Outlook: Trading Range Remains Intact, Will it Break?

Nasdaq 100 Price Forecast:

• The S&P 500 reclaimed the psychologically significant 3,000 mark on Tuesday
• Meanwhile, the Nasdaq 100 continues to edge closer to the all-time highs it saw in February
• After trading within an ascending channel since mid-April, a break would be a significant development

Nasdaq 100 Price Outlook: Trading Range Remains Intact, Will it Break?

The S&P 500 crossed the 3,000 mark on Tuesday, trading above the level for the first time since March 6 and achieving a significant technical benchmark. That said, the Nasdaq 100 stands in a class of its own as the tech-heavy index looks to retake all-time highs which exist just a few hundred points from the current price. Thus, it seems the Nasdaq 100 is in a strong position to make an attempt at the prior peaks in the weeks ahead as long as the ascending channel remains intact.

Nasdaq 100 Price Chart: 4 – Hour Time Frame (March – May)

As it stands, risk appetite appears to reign supreme, but recent developments in Hong Kong threaten to undermine sentiment. Still, prior highs established earlier this week may prove to be first barrier in a renewed attempt higher. The level roughly coincides with the top of the channel, so the area may provide notable resistance before the Nasdaq 100 can look to target record levels around 9,752.

Conversely, initial support may reside at the lower bound of the channel, currently around the 9,150 mark. A bearish break would amount to a significant technical development for the index and may constitute a complete review of the technical landscape. Either way, secondary support may well exist at the nearby Fibonacci level around the psychological 9,000 price point.

While there is little to suggest the index will stage a break out in the immediate future, it could be argued recent volatility is a sign of growing instability. Coupled with the fundamental landscape, traders should keep a close eye on the Nasdaq in the days to come. In the meantime, follow @PeterHanksFX on Twitter for updates.

--Written by Peter Hanks, Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX