fbNd100 Forecast | Government assistance supported stock markets | IFCM

Technical Analysis Nd100 : 2020-03-31

Recommendation for Nasdaq Index:

Strong SellSellNeutralBuyStrong Buy

Above 7910

Buy Stop

Below 6610

Stop Loss

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Senior Analytical Expert
Articles 1670
MA(200) Neutral
Fractals Neutral
Parabolic SAR Buy
Bollinger Bands Neutral

Chart Analysis

IFC Markets Tech Analysis

On the daily timeframe, Nd100: D1 broke through the resistance line of the medium-term downtrend. A number of technical analysis indicators formed signals for a further increase. We do not exclude bullish movement if Nd100 rises above its last upper fractal: 7910. This level can be used as an entry point. The initial stop loss is possible below the Parabolic signal, the last lower fractal and the minimum since January 2019: 6610. After opening a pending order, we move the stop loss following the Bollinger and Parabolic signals to the next fractal minimum. Thus, we change the potential profit / loss ratio in our favor. After the transaction, more risk-averse traders can switch to a four-hour chart and set a stop loss, moving it in the direction of trend. If the price overcomes the stop level (6610) without activating the order (7910), it is recommended to delete the order: market sustains internal changes not taken into account.

Fundamental Analysis

The U.S. government allotted $ 2 trillion to help the US economy hit by the Covid-19 epidemic. Will Nd100 quotes grow?

As a rule, the high-tech Nasdaq100 index possesses increased volatility and is the first to respond to news. Earlier, the largest international banks announced very pessimistic forecasts of a decline in the US GDP, which were taken into account in stock prices. In particular, JPMorgan Bank expects the US economic downturn in the 1st quarter up to 10.5% in annual terms and another 25% in the 2nd quarter. The amount of government assistance of $ 2 trillion is just about 10-11% of the annual US GDP and can help corporations survive the crisis caused by the coronavirus epidemic. Theoretically, the 2nd quarter for the US economy may not be as bad as previously expected. An additional positive factor may be a decrease in world oil prices. The value of West Texas Intermediate (WTI) dropped to $ 20 per barrel, the lowest since 2002. This will help reduce the costs of the American economy. Another good factor is the Fed’s policy of lowering rates and an almost unlimited supply of liquidity. US GDP data for the 1st quarter will be released only at the end of April. Non-farm Payrolls employment rate for March, which may affect the dynamics of the Nd100, will be published this Friday.

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