The Nasdaq 100 Index and its ETFs may be on the verge of a strong bullish breakout to a record high after forming a highly bullish ascending triangle pattern ahead of key earnings reports and the Federal Reserve’s interest rate decision, as well as earnings from leading U.S. companies. The index was trading at $25,605, just a few points below its all-time high of $26,178.
Nasdaq 100 Index Forecast: Technical Analysis Points to a Rebound
The eight-hour timeframe chart shows that the Nasdaq 100 Index has held steady in the past few weeks. It has remained below the important resistance level at $26,605, its all-time high.
A closer look shows that the index has formed an ascending triangle pattern, which is made up of a horizontal resistance and the ascending trendline. The two lines are now nearing their confluence level when bullish breakouts normally happen.
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The index has also remained above the 50-period and 100-period Exponential Moving Average (EMA), a sign that bulls have prevailed. It has remained above the Supertrend indicator.
Therefore, the most likely Nasdaq 100 Index forecast is bullish, with the next key target being at the all-time high of $26,605. A move above that level will point to more gains, potentially to the psychological level at $27,000.
Nasdaq 100 Index Chart | Source: TradingView
Top Magnificent 7 Earnings Ahead
This will be an important week for the Nasdaq 100 Index as its biggest companies publish their financial results. Key companies in the Magnificent 7, including Tesla, Microsoft, Meta Platforms, and Apple, will publish their numbers. These companies are valued at over $10 trillion and are some of the most important ones in the United States.
Analysts expect that these companies will publish strong numbers and issue strong guidance. For example, the average estimate is that Apple’s revenue rose by 11% to $138 billion as the new iPhone sales soared.
They also expect that Meta Platforms’ revenue jumped by 20% in the last quarter to over $58 billion, bringing the annual figure to $200 billion. Also, Microsoft’s revenue is expected to be $80 billion, up by 15% YoY.
More large American companies like Visa, Mastercard, ExxonMobil, Chevron, and UnitedHealth will release their earnings. Also, other Magnificent 7 companies like Amazon and Google will release their numbers next week.
The Nasdaq 100 Index may jump to a record high despite the ongoing risks in the financial market, including the Japanese economy issues, the rising odds of a government shutdown in the United States, and a trade war between the United States and Canada.
A government shutdown, while bad for the economy, does not have a negative impact on the stock market. For example, the Nasdaq 100 and other indices like the S&P 500 and the Dow Jones rose when the government experienced its longest shutdown last year.
Similarly, the threat of a trade war between Canada and the United States will likely not have a major impact on stocks because of the concept of TACO.
This concept is based on the fact that Trump always chickens out from his threats, especially when they have a negative impact on the stock market. For example, he pulled back his threat on Greenland last week.
The index will also react to the upcoming Federal Reserve interest rate decision, which will come out on Wednesday.
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