The US-China tensions have spooked investors on the tech stocks on the Nasdaq 100 and led to a broad selloff on the day. The worst-hit stock was Intel, which plunged 15.1% after a delay in the release of its next-generation microchip. This delay prompted several downgrades to the stock, whose slump has helped drag down the Nasdaq 100.
Even the gains of Advanced Micro Devices (15.8%) have been unable to sway the sentiment on the Nasdaq, which also had to endure bearish pressure from a lukewarm Flash Manufacturing PMI report and the worsening coronavirus situation in the US.
The coronavirus case count in the US has topped 4.05million. Florida witnessed 173 deaths on Thursday; a daily record. The Washington Post reports that the latest 1 million infections occurred in just 15 days. Florida, Louisiana and Mississippi are among 40 states in the US that are seeing rising cases of the coronavirus. Behavioural attitudes to the prevention techniques continue to be an issue, and this means that the pressure on the US markets could persist for a while.
Technical Outlook for Nasdaq 100
The index continues to trade within the ascending channel. Attempts by the bears to force a breakdown of the channel on the day did not succeed, as price merely violated the channel border before bouncing on the 10307.3 support line. This level is the price to break for the bears. A breakdown of the 10307.3 support should accompany a downside break of the channel to reinforce the downside move. If this succeeds, then 10156.5 could become a new target. Further selling pressure then targets the 9867.1 and 9730.2 price levels, in that order.
However, if the bulls can take some strength from today’s bounce, they could force a price recovery that targets the upper channel boundary. This move would have to take out the 10,866.5 level to be able to aim for the recent highs at 11.069. Above this level, new highs on the Nasdaq 100 beckon.
Nasdaq 100 Daily Chart