The Nasdaq has staged a strong recovery from the 6,600 technical area after the Federal Reserve announced a massive bond buying scheme, and the US Congress approved a $2tr coronavirus spending bill.
Nasdaq 100 technical analysis highlights that the index could rally towards the 9,400 level if the 7,980 resistance level is overcome.
Nasdaq 100 medium-term price trend
The Nasdaq 100 has staged a much-needed recovery, which was largely driven by the Federal Reserve’s massive QE package, and the approval of a $2tr coronavirus spending bill.
Nasdaq 100 technical analysis shows that the index has bounced sharply from major trendline support on the daily time frame.
The key rising trendline is formed from the February 2016 low to the December 2018 swing-low.
Although the medium-term trend is still heavily bearish, traders will be encouraged that the Nasdaq bounced from this key trendline.
The pair’s 200-day moving average, around the 8,200 level is a valid upside target while price remains above this trendline.
Nasdaq 100 short-term price trend
Nasdaq 100 technical analysis shows that the index is bearish over the short term while the price trades below the 7,800 level.
The one-hour time frame is showing that a bullish inverted head-and-shoulders pattern will form if the price reaches the 7,980 level.
The recovery in the Nasdaq has so far reached the 7,760 level, falling just short of the 7,980, which was required to confirm the structure of the bullish reversal pattern.
According to the size of the potential bullish pattern, the price could rally towards the 9,000 level if it reaches its full upside potential.
Key short-term support above the current yearly low for the index is found at the 7,200 and 7,000 levels.
Nasdaq 100 technical summary
Nasdaq 100 analysis suggests that the index could stage a huge rally if the price moves above the 7,980 level. Bulls are currently struggling to form a large reversal pattern on the lower time frames.