Nasdaq 100: Wall Street’s rebound hangs on US inflation

The Nasdaq 100 attempts to rebound from major support at 12,200 points

In terms of technical analysis, the price of the Nasdaq 100 is back on an important support zone at around 12,200 points which not only corresponds to the lower limit of the descending channel in which it has been evolving since the beginning of the year, but also the March 2021 trough.

The Nasdaq’s presence at the bottom of its channel suggests an “oversold” situation, as does the proportion of NYSE stocks which hit a one-year low on Monday. 30% of stocks listed on the NYSE hit a one-year low on Monday, which most often preceded a very short-term rally.

The Nasdaq therefore seems well positioned to rebound, since it is showing significant signs of oversold after returning to a major support, but the publication of the figures on US inflation this afternoon will be crucial.

Better-than-expected inflation numbers would put even more pressure on the Fed to tighten monetary policy, bolstering rate hike expectations and putting pressure on asset valuations. Conversely, inflation figures below expectations should support the markets.

Entry: Purchase above 12,500 points

Stop: 12,200 points

Objective: 13,500 points

Risk/reward ratio: 5

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