Nasdaq 100, Dow Jones, DAX 30 Forecasts: Neutral
- After consolidating last week, the Nasdaq 100 could look to continue its upward climb
- The Dow Jones is still wrestling with an upward channel from June
- The DAX 30
Nasdaq 100 Technical Forecast
After an explosive start last week, the Nasdaq 100 completed the round-trip on Friday, closing just marginally higher than Monday’s open. Consequently, last week served as a period of consolidation for the Nasdaq after it established big gains in short order – largely devoid of a direct catalyst. Therefore, the foundation for a continuation higher has been laid and the tech-heavy index may look to employ support below as a springboard if risk appetite reignites next week.
Nasdaq 100 Price Chart: 4 – Hour Time Frame (September 2020 – October 2020)
To that end, initial support may reside around the 11,800 level which is narrowly beneath Friday’s closing price. Last week we outlined a potential cup and handle formation on the Nasdaq which may still be in play, but has undoubtedly been muddied somewhat. Regardless, the same question of support remains. Will 11,800 serve as a willing launchpad, or will further consolidation down to the 11,600 level be required?
Either way, I believe the medium-term outlook is tilted to the topside which may see the Nasdaq encounter resistance should it continue higher in the weeks ahead. An initial barrier likely resides around 12,045 which served as both resistance and support last week, followed by subsequent resistance around the 12,200 level. Should 12,200 break, bulls may look to continue the rally, possibly setting their sights at the all-time high of 12,465.
Dow JonesTechnical Forecast
Elsewhere, the Dow Jones is negotiating the same ascending trendline it has been since June. Previously serving as support, the band has since assumed a more resistive role helping to keep the Dow contained last week. In the week ahead, it may look to do so again, effectively standing between the current trading price and the September peak of 29,200.
Dow Jones Price Chart: 4 – Hour Time Frame (September 2020 – October 2020)
On the other hand, the Dow may look for support around the 26,185 mark should bearishness continue next week. 28,570 may offer some influence on an intraday basis, but Friday’s decline undermined its merit to some degree. Suffice it to say, the Nasdaq 100 and Dow Jones seem vulnerable to further consolidation in the shorter-term that may only help guide them higher over the longer-term. As a result, supportive areas may serve as potential entry points for bullish exposure.
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DAX 30 Technical Forecast
Across the Atlantic, the DAX 30 looks to enter the week perched narrowly beneath resistance around 12,295.
–Written by Peter Hanks, Strategist for DailyFX.com