The market breadth indicators for the Nasdaq 100 have shown improvement recently. After a slight decline, the percentage of component stocks above their 20-day and 50-day moving averages has increased to above 50%. This is a positive sign for the overall market sentiment as it indicates a potential uptrend in the short to medium-term.
A short-term bullish momentum condition was sighted at the retest of the 50-day moving average for the Nasdaq 100. This could potentially signal a bullish reversal in the near future. However, it is essential to watch the key short-term support level at 19,520 ahead of a risk event, which includes the upcoming earnings results of Alphabet and Tesla after the US session close.
Nasdaq 100 Performance
In the past two weeks, the Nasdaq 100 has experienced a decline of 6.2% from its all-time high to a recent low. This underperformance can be attributed to the bull steepening of the US Treasury yield curve, which has affected tech stocks in particular. Despite this, the technical analysis suggests that the Nasdaq 100 may be at an inflection point for a potential bullish reversal, especially with the upcoming earnings releases of Tesla and Alphabet.
The recent improvement in the market breadth indicators is a positive sign for the Nasdaq 100. The percentage of component stocks trading above their moving averages has increased, indicating a healthy uptrend in the short to medium-term. This suggests that the overall market sentiment towards tech stocks is improving.
Short-Term Trend Analysis
After a bullish divergence condition was sighted on the hourly RSI momentum indicator, the price actions of the Nasdaq 100 have shown positive follow-through. This is further supported by the price reaching its 50-day moving average and its medium-term ascending trendline. The potential bullish reversal scenario can be confirmed if the key support level at 19,520 holds. However, a break below this level could invalidate the bullish scenario and lead to a deeper corrective decline.
The technical analysis of the Nasdaq 100 suggests a potential bullish reversal in the near future. The improvement in market breadth indicators, along with positive price actions, indicates a healthy uptrend in the short to medium-term. However, it is crucial to monitor key support levels and upcoming risk events to assess the sustainability of this potential reversal.
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