Nasdaq 100 Price Analysis — October 20

On the macro level, investors are once again chasing after shares of tech companies after a steep sell-off in the US equity markets last month. Despite the last week’s intense dip, the tech-based Nasdaq 100 (NDX) is just 3% below its all-time high. Many traders, especially retail traders, have fought to buy back into call options in the tech index.

Meanwhile, speculators in the futures market have had a complete change of heart regarding the NDX. according to a recent report from the CFTC, massive funds have been recalled from what was regarded as one of the largest short positions in over a decade.

Also, the influx of cash into the Invesco QQQ Trust Series 1 (NASDAQ: QQQ)—a popular exchange-traded fund that tracks the NDX—is very substantial. Based on data from Lipper, the QQQ now has $144.65 billion in assets under management, a new record high.

The volume of equity call options has rebounded significantly, especially for single-stock contracts. Generally, the ratio of ‘call’ options to ‘put’ options is a strong measure of the trading sentiment of traders in the market. That said, this ratio has been on the rise since September and is close to its peak, indicating that traders are extremely bullish.

Nasdaq 100 (NDX) Value Forecast — October 20

NDX Major Bias: Sideways

Supply Levels: 11890, 12000, and 12220.

Demand Levels: 11650, 11307, and 11000.

The Nasdaq 100 is currently wracked with a bears sentiment following yesterday’s speech by Jerome Powell. The index has broken below the month-old trendline, following last week’s bear market. However, the price was swiftly caught by the 50 SMA, where it was able to facilitate a mild rebound. At press time the index is trading at 11,780 (pre-market data) and will likely come into contention with the 11890 resistance later in the North American session.

On the flip side, bears would have to break below the 50 SMA (11611) to facilitate a bearish continuation. However, this seems unlikely considering the sentiment surrounding the index.

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