US stock indices tumbled lower yesterday after President Joe Biden proposed doubling the capital gains tax rate to nearly 40%. This type of tax focuses on investment income and led to US stock market indices dropping by the largest amount since March.
At one point the Nasdaq 100 stock index was down over 1%. Interestingly, the index has stalled at its previous all-time high price level around ~$13,906.00. This technical area of resistance will be key to determining the next move in tech stocks.
As shown in the chart below, the price could retrace back down towards support around the $13,300.00 price level. This also coincides with the 50-period (red) exponential moving average.
Source: Admirals MetaTrader 5, NQ100, Daily - Data range: from Aug 4, 2020, to Apr 22, 2021, performed on Apr 22, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
Last five-year performance: 2020 = +47%, 2019 = +38%, 2018 = -0.5%, 2017 = +30%, 2016 = +5%, 2015 =+8%.
Price may also find support around the 20-period (blue) exponential moving average. During the run higher from November 2020 to February 2021, there were multiple bounces of this moving average.
Analysing price action patterns at these levels will be key in confirming the appetite for buyers to step in once again.
Did you know that you can use the Trading Central Technical Ideas Lookup indicator to find actionable trading ideas on thousands of other instruments across Forex, stocks, indices, commodities and more?
You can get this indicator completely FREE by upgrading your MetaTrader 5 trading platform provided by Admirals (formerly Admiral Markets) to the exclusive Supreme Edition! You’ll also receive a whole range of advanced trading tools such as correlation and sentiment indicators!
Start your free download by clicking on the banner below:
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
- With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst, Roberto Rojas (analyst), (hereinafter “Author”) based on their personal estimations.
- Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
- Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.