Can NASDAQ Rally? Key Levels to Watch This Week

NASDAQ 100 on a 4-Hour Timeframe 

Past performance is not indicative of future results. All historical data, including but not limited to returns, volatility, and other performance metrics, should not be construed as a guarantee of future performance
 

NASDAQ 100 on a 4-hour timeframe has shown a period of bullish recovery from mid-September 2024 to late October, establishing a series of higher highs and higher lows. After bouncing from the 18351 support zone in mid-September, the index climbed steadily, driven by stronger-than-expected tech sector gains in September.  

This upward momentum was briefly interrupted by corrective movements around the 20000 and 20500 levels before reaching near 20700. The broader trend over this period remained upward, supported by the 100- and 200-period moving averages providing dynamic support as the index approached key resistance zones. 

In recent sessions, NASDAQ 100 has encountered increased selling pressure around the 20700 level, with price action pulling back toward the 20000 support level. As of October 31, the index is trading near this psychological support, showing signs of potential consolidation within an ascending channel. Key technical indicators are revealing mixed signals; the RSI is hovering around 36, indicating a possible oversold condition, while the stochastic oscillator is in oversold territory but without a clear reversal signal. The convergence of the 50- and 100-period moving averages near current levels could provide temporary support if downward pressure continues. 

Momentum indicators suggest a potential pause in the recent bearish movement. The RSI's current level hints at oversold conditions that may attract buyers in the short term, while the stochastic oscillator has yet to confirm a clear upward reversal. The index's approach to the lower bound of the ascending channel, combined with historical support near 20000, indicates that the next few sessions may see buyers stepping in. However, the RSI’s position just above 30 reflects limited immediate upside potential unless a stronger catalyst emerges. 

In the main scenario, if the NASDAQ 100 holds above the 20000 support, a rebound towards 20500 is likely, with potential gains extending to 20700 should momentum recover. Sustained buying interest at the 20000 level would likely reinforce bullish sentiment, enabling a re-test of recent highs. However, if the price breaks above 20700 decisively, further gains towards 21000 could unfold, aligning with a continuation of the broader bullish trend observed since September. 

Alternatively, a break below the 20000 support could accelerate selling towards 19600, aligning with the next significant support level on this timeframe. In this bearish scenario, failure to hold at 19600 would likely introduce a more significant downtrend, with potential targets below 19000. This move could trigger additional downside pressure if market sentiment turns sharply negative or if earnings results disappoint in the upcoming releases. 

Investor caution remains essential as earnings season introduces heightened volatility. Recent mixed earnings, such as Microsoft’s results, have contributed to increased uncertainty, with broader market sentiment reflecting cautious optimism amid economic and geopolitical factors. High inflation rates and the possibility of tighter monetary policies weigh heavily on tech stocks, while the US elections and geopolitical risks could further influence the NASDAQ 100’s performance in the near term. 

Summary: 

• NASDAQ 100 holds key support level at 20,000. 
• Tech sector gains continue driving index momentum upward. 
• Recent selling pressure signals potential pullback risk. 
• RSI indicates possible oversold conditions attracting buyers. 
• Earnings season adds volatility and uncertainty to the market. 
• A breakout above 20,700 could trigger a new rally.