Index in Focus: NASDAQ 100

Close-up of stock market board
Joe Perry
By :  ,  US Market Analyst

Could the NASDAQ 100 (NDQ) bounce to 15265?  On November 22, 2021, the tech heavy index made an all-time high of 16764.86!  Since then, the NDQ has dropped to a low of 11037.21, a loss of 34% from high to low.  The index is currently trading near 11600 as we approach end of month, end or quarter, and end of the first half of 2022.  Stock markets are having the worst first half of the year in half a century. 

What is the NASDAQ 100?

But is there a chance that the NASDAQ 100 could bounce in the second half of the year? In the first quarter of the year, the NDQ fell from the all-time highs to the 38.2% Fibonacci retracement level from the lows of March 2020 to the highs of November 2021 near 12972.62.  The index then bounced to the 61.8% Fibonacci retracement level from the highs of November 2021 to the lows of March 14th.  Since then, the NASDAQ 100 has fallen in a descending wedge formation and is nearing the apex.  The target for a descending wedge is a 100% retracement, or 15265.  Note that the recent low in the NDQ is near the 61.8% Fibonacci retracement from the March 2020 low to the November 2021 high.

20220630 nasdaq 100

Source: Tradingview, Stone X


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In addition, on a 240-minute timeframe, price had fallen threw the 161.8% Fibonacci extension from the March 14th lows to the March 29th highs, only to bounce off the bottom, downward sloping trendline of the descending wedge.  It failed to continue lower and is currently trading near the 161.8% Fibonacci retracement level near 11600.

20220630 nasdaq 100 240

Source: Tradingview, Stone X

So why can the NASDAQ 100 bounce now?

  1. The index is nearing the apex of the descending wedge
  2. NDQ has held above the bottom trendline of the wedge
  3. The NASDAQ 100 is holding above the 61.8% Fibonacci retracement level from the low of March 2020 to the high of November 2022, near 10629
  4. The index has traded below, and failed to stay below the 161.8% Fibonacci extension from the low of March 14th to the high of March 29th,near 11682.66

Where can the NASDAQ 100 go?

As mentioned earlier, the target for the breakout of a descending wedge is a 100% retracement of the wedge, or 15265.  However, AFTER it breaks out of the top of the wedge, first resistance is at the highs of June 27th at 12175.98.  Above there is a band of resistance between 12897 and 13065.  The third level of horizontal resistance is at 13556.67.  Note that are additional resistance levels before the target, these are only the first three.  However, there is still room on the downside that price can move to before the pattern fails.  The first support level is the low from June 16th at 11037.  Below there is the bottom trendline of the wedge near 10775 and then the previously mentioned 61.8% Fibonacci retracement from the long-term timeframe at 10629.77.

It's month end, quarter end, and first half of year end, and the NASDAQ has fallen as much as 34%.  Is it time for the NASDAQ 100 to bounce?  Possibly, as price is approaching the apex of a descending wedge.  Asking for price to reach the target of 15265 is a lot for now.  But if it does breakout, lets see if the NASDAQ 100 can move above the most recent high of 12175 first.

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