Jump to content

Nasdaq 100 Index price averages produce 'golden cross'

Recommended Posts

While the Nasdaq 100 price is correcting in the near term, the golden cross indication suggests that a longer term bull trend could still be emerging.

bg%20bull%20and%20bear%20546456456456.pnSource: Bloomberg
 Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Thursday 02 March 2023 

Nasdaq 100 – Golden Cross confirms

2MarNasdaq.pngSource: IG

A daily chart of the Nasdaq 100 (US Tech 100) highlights that the 50-day simple moving average (50MA) (green line) has recently crossed above the 200-day simple moving average (200MA) (blue line). This moving average crossover is known as the ‘golden cross’, a suggestion that a new bull trend may be emerging.

Inversely, when the 50MA crosses below the 200MA the technical analysis term associated with the occurrence is referred to as the ‘death cross’. A death cross is a suggestion that a new long term bear trend may be emerging.
The chart above marks ‘death cross’ scenarios on the Nasdaq 100 with the black arrows and ‘golden cross’ scenarios with the blue arrows. The chart shows these occurrences since the beginning of 2019.

It should be noted that the ‘golden cross’ is considered a longer-term indication of trend. Short term traders might use this in determining a bias to trades on the index i.e. looking for opportunities for long entry rather than short entry, while the longer term trend is considered up (by these metrics).

Nasdaq 100 - Further technical indications


2MarNasdaq2.pngSource: IG

The start of 2023 has seen the price of the Nasdaq 100 breaking above long-term trend line resistance (red line), before a correction from the short-term highs ensued. The correction or pullback has now taken the price into oversold territory as noted by the stochastic indicator on our chart.

In line with the longer-term bull trend, suggested by the ‘golden cross’ and the trend line break, traders might consider looking for long entry should some bullish signals confirm in the near term to support.

A short-term bullish indication might be considered should we see the price produce a strong close above the black trend line on the chart above. Ideally this trend line break should be accompanied by a sharp move out of oversold territory by the stochastic indicator.
In this scenario, 12900 and 13190 become upside resistance targets from the move, while a close below the 11665-support level might be used as a stop loss indication for the trade setup should it confirm.

Nasdaq 100 – IG client sentiment

2MarNasdaqsentiment.pngSource: IG

As of the 2nd of March 2023, 60% of IG clients with open positions on the Nasdaq 100 expect the price to rise over the near term, while 40% of IG clients with open positions expect the price to fall.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 18:53

    Newest Member
    Joined 29/09/23 20:41
  • Posts

    • Liquidity is either buy or sell side and liquidity Purge...CHoch change of characters is simply MSS market structure shift. Confusing 
    • Hello, Hope this finds you well. I have prepared the calculator. Attaching the same for your perusal.  https://1drv.ms/x/s!AlwK9pqvvQo_aWChCgsxdHMqpLw?e=0zW5co   The yellow cells are the inputs and the color coded region is the P&L.  As mentioned and highlighted, 80 trades with win rate of 50% would lead to P&L of 1000.  Similarly, the other sheet in the calculator is based on the profit and loss per trade for given trade number and win rate.   The cells can be changed as per scenario to get insights.    please let me know if any clarity is required. 
    • Nikkei 225, FTSE 100 and S&P 500 try to recover into month end Outlook on Nikkei 225, FTSE 100 and S&P 500 as the oil price, US yields and greenback retreat from their lofty heights. Source: Bloomberg  Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 29 September 2023 11:36 Nikkei 225 stabilizes as September draws to an end The Nikkei 225 stabilizes into month-end despite Japan consumer morale falling to a six-month low as better-than-expected preliminary industrial production and a positive close on Wall Street aided Asian stock markets to stem their September falls. The Nikkei 225 thus managed to stay above its Thursday low at 31,665.4 which was made close to the 25 August low at 31,563.2. Were this level to give way in October, the August low at 31,251.2 would be in focus. Immediate resistance to contend with is the 22 September low at 32,167.9, followed by the mid-September low and the 55-day simple moving average (SMA) at 32,396.5 to 32,464.9. While below this area, bearish pressure retains the upper hand. Source: ProRealTime FTSE 100 bounces off support into month end The FTSE 100 is trying to build on Thursday’s Wall Street led gains following dovish comments by Federal Reserve (Fed) members Goolsbee and Barkin and better-than-expected UK revised business investment numbers. The 200-day simple moving average (SMA) at 7,650 is thus back in sight. Potential stumbling blocks above it can be seen at the 7,688 June high and also between the 7,723 July peak and the current September high at 7,747. These highs will need to be bettered for the psychological 7,800 mark and the 8 May high at 7,817 to be back in play. Minor support sits at Wednesday’s low at 7,553. A fall through this week’s low at 7,523 would open the door to the psychological 7,500 region. Source: ProRealTime S&P 500 ends nine straight day fall A retreat in the oil price, greenback and US yields amid dovish Fed talk and sharply lower revised consumer spending have helped the S&P 500 stem its nine straight day fall to 4,239 and led to a small positive close on Thursday. While this week’s low underpins, the late June to August lows at 4,328 to 4,337 will be eyed. First, though, Thursday’s high at 4,318 will need to be exceeded. Below the September low at 4,239 lies the major 4,214 to 4,187 support area which consists of the early and late May highs and the 200-day simple moving average (SMA). Source: ProRealTime
  • Create New...