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Nasdaq 100 Forecast: Index Looks to NVDA Earnings, Key Support

Nasdaq 100 Forecast: Index Looks to NVDA Earnings, Key Support

2019-08-14 19:00:00
Peter Hanks, Analyst
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Nasdaq 100 Outlook:

  • The Nasdaq threatened the 7,500 level on Wednesday but enjoys nearby support that the Dow Jones and S&P 500 lack
  • That said, volatility has been rampant amid the ongoing trade war uncertainty, which could put the longer-term trend at risk
  • Interested in equities? Check out the DailyFX Podcast with Andrew Milligan, head of global strategy at Aberdeen Standard Investments

Nasdaq 100 Forecast: Index Looks to NVDA Earnings, Key Support

The Nasdaq 100 traded lower on Wednesday alongside a troubled Dow Jones and S&P 500. While all three indices fell under pressure, the Nasdaq enjoys a bounty of technical support nearby relative to the other indices. Paramount among these levels is the ascending trendline from December which will look to assist the Nasdaq’s climb.

Nasdaq 100 Price Chart: Daily Time Frame (September 2018 – August 2019) (Chart 1)

nasdaq 100 price chart stocks .

Chart created with TradingView

In addition to August lows around 7,375, subsequent support will look to reside around 7,215. Should volatility persist and sentiment crumbles further, bears could look to push the tech-heavy Index down to June lows around 6,965. The area also marks the 50% retracement from December lows to July highs.

Turning to a constituent of the Index, chip-maker Nvidia (NVDA) will report earnings after the close on Thursday. Consequently, implied volatility for the stock is heightened at 7.8% and insight from one of the Nasdaq’s high-flyers could look to exert considerable influence on the Index.

Nasdaq 100 Price Chart: Daily Time Frame (January 2017 – August 2019) (Chart 2)

nasdaq 100 stock price chart

Chart created with TradingView

As a leading member of the semiconductor sector, NVDA is afforded significant weight in the SOX ETF and any commentary on sector-specific themes would likely jolt the whole industry. That said, NVDA suffered a fall from grace in the fourth quarter of 2018, which it has yet to recover from. With tarnished sentiment, poor earnings could hit the stock particularly hard.

Nasdaq 100 Forecast: Index Looks to NVDA Earnings, Key Support

Either way, we can attempt to chart the stock’s expected price range following earnings on Thursday with data from Bloomberg. At 7.8%, implied volatility suggests NVDA shares could trade anywhere from $138 to $161.5 – an area that is largely devoid of significant technical levels. Nearby support may reside around $144.5 where price bottomed in February and March. However, price action in June suggests the line lacks significant technical merit and is unlikely to entirely stall a move derived from earnings.

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On the other hand, resistance to the topside will look to reside around $165.25 – the 23.6% Fibonacci level marked by the stock’s 2018 high and low. Prior to the level, a pocket of open air slightly beneath $160 could look to accelerate NVDA gains if earnings impress. While the market awaits NVDA earnings, follow @PeterHanksFX on Twitter for technical analysis and fundamental updates.

NVDA Stock Price Chart: Daily Time Frame (March – August) (Chart 3)

nvda stock price chart earnings

Chart created with TradingView

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

Contact and follow Peter on Twitter @PeterHanksFX

Read more:Dow Jones, DAX 30, FTSE 100 Forecasts in the New Trade War Climate

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