Index in focus: Nasdaq 100 (US Tech 100) probing record highs amid earnings maelstrom

The five FAAMG stocks all report earnings this week, and together, those five stocks alone account for 40% of the Nasdaq 100’s assets...

In an inversion of many traders’ perceptions, the tech-focused Nasdaq 100 index has actually been lagging its “stodgy” US index rivals, the Dow Jones Industrial Average and S&P 500, in recent weeks. Both the other popular US indices broke out to fresh record highs late last week, but the Nasdaq 100 is just testing its equivalent highs today.

As we outlined in our “Big Tech” earnings previews (here and here), the five FAAMG stocks all report earnings this week, and together, those five stocks alone account for 40% of the Nasdaq 100’s assets. Unfortunately for bulls, yesterday’s mixed release from Facebook (FB) is leading to a -4% decline in that stock and preventing the index from conclusively breaking out above previous resistance at 15,675, though Tesla’s big surge is offsetting some of that bearish momentum (see chart below). Over the rest of the week, traders will key in on the releases from MSFT and GOOG this afternoon followed by AMZN and AAPL on Thursday.

From a technical perspective, the Nasdaq 100 is showing a clear bearish divergence in its 14-day RSI indicator at recent highs, signaling waning buying pressure. That said, the index did manage to hold above both its bullish trend line and the 50- and 100-day exponential moving averages, keeping the uptrend intact:


Source: TradingView, StoneX

Looking ahead, this week’s earnings reports will go a long way toward determining whether the tech-heavy Nasdaq 100 breaks out to new highs and extends its uptrend toward 16,000 or whether the momentum divergence will lead to a significant top and break of support in the 15,000 range.

With a history of these companies “underpromising and overdelivering” on earnings and the long-term trend still pointing higher, the odds may favor a breakout and continuation from here, but it always pays to remain flexible as a trader.

Stay tuned to our twitter account for the latest earnings updates and levels to watch on major indices throughout this week and beyond.

How to trade with

Follow these easy steps to start trading with today:

  1. Open a account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.


Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account