Nasdaq 100: Robust Tesla Earnings, Sales Forecast Set Stage For Rally

This, coupled with the anticipation of a gradual Fed easing cycle and the uncertainty surrounding the US presidential election, has dampened investor sentiment.

However, on Wednesday, Tesla’s robust earnings report significantly improved the outlook for earnings, potentially leading to higher prices for the Nasdaq 100 index and reassuring investors.

Nasdaq 100 Technical Analysis

Bears tried to take control once by breaching the SMA line. However, they failed to sustain the move, and bulls soon returned to make new highs. The uptrend has again paused at the 20504.02 resistance level, where bears showed strength with a strong candle that broke below the 22-SMA.

Furthermore, the price broke below and retested its bullish trendline. The retest made a lower high, showing weaker bullish momentum. Moreover, bears pushed prices lower to puncture the 20004.28 support and make a lower low. However, to confirm a trend reversal, the price must break below 20004.28 and start making consistent lower highs and lows.

Given the strong fundamentals supporting an increase in prices, the Nasdaq 100 is poised to climb and retest the 20504.02 resistance. A successful break above this level would signal a resumption of the uptrend. However, if the resistance holds, the price might enter a period of consolidation.

Nasdaq 100 recently broke above the 19808.83 resistance level, retested it and made a new high. However, price action shows that bulls have hesitated to push the price far above the SMA. As a result, it has retested the SMA before climbing far above.

If the SMA holds firm, the price will climb to the 20709.83 resistance level. However, if bearish momentum surges, the trend might reverse with a break below the pivotal 22-SMA and the 19808.83 support level. A new downtrend would allow the price to revisit the 18350.64 support level. On the other hand, if bulls remain in the lead, the Nasdaq 100 will likely make new record highs above the 20709.83 resistance level.

Key Support Levels

Support 1: 20004.28, a recent 4-hour chart swing low

Support 2: 19808.83, a recent daily chart swing low

Support 3: 19504.54, a 4-hour chart resistance turned support

Support 4: 18350.64, a daily chart swing low

Key Resistance Levels

Resistance 1: 20504.02, a recent 4-hour chart swing high

Resistance 2: 20709.83, a recent daily chart swing high

Nasdaq 100 Fundamental Analysis

Recent earnings reports support further upside for the Nasdaq 100 index. The most recent upbeat report came from Tesla, the first of the major companies. According to the report, Tesla generated a revenue of $25.18 billion, slightly below the Wall Street estimate of $25.37 billion. Moreover, the company forecasted sales rising by 20-30% in 2025, indicating a bright demand outlook.

Furthermore, the report revealed that Q3 profit margins from sales minus regulatory credits grew by 17.05%, well above estimates of 14.9%. The report boosted Tesla shares by over 12% after market hours. This bullish momentum will likely lift the Nasdaq 100 index today’s market opening.

Investors are keenly focused on factors like the upcoming presidential election, as the uncertainty about the possible outcome has significantly impacted risk appetite.

Therefore, good news might not cause a massive rally in the equities market. Most market participants prefer to wait on the sidelines. Meanwhile, others are dumping risky assets like stocks and buyer safer ones like the dollar and gold.

Nevertheless, positive earnings reports improve the outlook for the future. If businesses are performing well now, they can only do better as the Fed continues cutting borrowing costs. All eyes are now on other significant reports from tech giants like Nvidia, which might cause some volatility.

Final Thoughts

The Nasdaq 100 will likely rise after Tesla’s upbeat earnings report. However, the uncertainty surrounding the upcoming elections might keep investors from making significant moves. Therefore, any gains will likely be limited.

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