The Nasdaq 100 is showing stabilisation after breaching its descending channel and reclaiming the 50-day moving average (50-DMA). However, its momentum is restricted near the 25,890 level, as noted by analysts.
Recent Movements of the Nasdaq 100
Recently, the Nasdaq 100 moved beyond the upper boundary of a steep descending channel and regained the 50-DMA, yet progress halted near the earlier down gap at 25,890 points. There is potential for the index to form a small base.
Currently, the 50-DMA, at about 25,200 points, serves as short-term support, vital for continuing the upward trend. Should the index break above 25,890 points, it might lead to an extended upward movement towards October highs near 26,180 points, with future targets around 26,600 points.
The FXStreet Insights Team, composed of journalists, selects market observations from well-known experts, incorporating both commercial notes and further insights from both internal and external analysts.
We are observing the Nasdaq 100 forming a small base after breaking its recent downtrend. The index has stalled just below the 25,890 level, which represents a key resistance point from a prior gap down. The market appears to be in a holding pattern, waiting for a catalyst to determine its next major move.
Key Trading Considerations for Nasdaq 100
For bullish traders, a sustained move above 25,890 is the critical signal we need to see in the coming days. This would confirm the uptrend and open the door for buying call options or call spreads targeting the October highs near 26,180. The recent November CPI report, which showed core inflation cooling to a 2.8% annual rate, supports the potential for a year-end rally if this resistance breaks.
However, we must watch the 50-day moving average around 25,200 as our line in the sand. If the index falls below this support, it would signal that the recent strength was temporary, and protective puts should be considered to hedge against a decline. As we saw in the third quarter of 2024, a failure to hold this key average can lead to a rapid retest of lower levels.
Given that trading volumes are expected to thin as we approach the holidays, the index could remain range-bound for a period. This environment is favorable for traders who sell premium, such as through iron condors, capitalizing on sideways movement between the 25,200 support and 25,890 resistance. The CBOE Volatility Index (VIX) has also settled near 16, which suggests traders are not pricing in extreme moves in the immediate short-term.
