Nasdaq 100 tumbles at all-time high. What’s next?

April 23, 2021 12:30

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. 

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