Equities Watchlist: Nasdaq Is About to Hit a Key Resistance Zone

U.S. equities received a boost from the U.S. CPI report last week.

Can the bulls sustain the upswing this week?

Not if the equities index finds resistance at a key technical zone!

Nasdaq 100 (NAS100): Daily

Nasdaq 100 (NAS100) Daily Chart

In case you were too busy reading tweets about the FTX and crypto drama, know that the NASDAQ 100 U.S. equities index was hanging around its 2022 lows when the U.S. CPI report hit.

The headline and core figures came in a smidge better than what markets are expecting. But whether it’s the start of a new trend or a blip in the bigger inflation picture, the markets reacted by selling USD and buying risky (but non crypto!) assets.

U.S. equities got a boost with the NAS100 gapping higher and jumping from the 11,000 area all the way to the 11,800 area.

But now the Nasdaq is almost at the 12,000 psychological handle that’s near the 100 SMA on the daily time frame.

Not only that, but the index is also not too far from the 50% Fibonacci retracement of September’s downswing AND a trend line resistance that hasn’t been broken since December 2021.

Let’s see if the bulls can sustain their momentum this week.

We’ve got a couple of market events that might influence risk sentiment including today’s meeting between President Biden and Xi Jinping; this week’s U.S. PPI and retail sales reports, and a couple of scheduled Fed member speeches.

Headlines that support risk-taking or the Fed ending its aggressive hawkish moves would extend NAS100’s upswing. The index could bust above thee trend line resistance and head for the 200 SMA before we see sustained selling.

Don’t discount a longer downtrend though!

If enough Fed members speak hawkish remarks, or if this week’s events bring the spotlight back to global growth concerns, then the U.S. equities index could go back to previous inflection points like 11,500 or 11,000. Yipes!