NASDAQ Index, SP500, Dow Jones Analysis – NASDAQ Retreats As Tesla Falls 9%

Key Insights

• SP500 is losing ground due to the major sell-offs in Tesla and Netflix stocks. 
• NASDAQ declined towards the 15,500 level amid a strong pullback in tech stocks. 
• Dow Jones gained ground as traders focused on defensive sectors. 

SP500

SP500 is losing ground due to the strong sell-offs in Netflix and Tesla stocks. Both stocks are down by 8-9% as traders react to their earnings reports. Today, traders also focused on the economic data. Initial Jobless Claims report showed that 228,000 Americans filed for unemployment benefits in a week. Existing Home Sales declined by 3.3% month-over-month in June, compared to analyst consensus of -1.2%. Treasury yields tested weekly highs, putting additional pressure on major indices.

From the technical point of view, the current pullback is healthy as SP500 was overbought. The nearest support level for SP500 is located in the 4430 – 4450 range, but SP500 may also get some support near the 50 MA at 4500.

NASDAQ

NASDAQ gained downside momentum amid a strong sell-off in tech stocks. Traders are taking profits after the recent rally, while the disappointing performance of Tesla and Netflix served as a trigger for the pullback.

In case NASDAQ settles below the 50 MA at 15,510, it will move towards the support area in the 15,200 – 15,300 range. RSI remains in the moderate territory, so there is enough room to gain additional downside momentum.

Dow Jones

Dow Jones gained ground as traders focused on defensive sectors. The rally in Johnson & Johnson stock, which gained 6% after the earnings report, provided additional support to the index.

It should be noted that Dow Jones has already faced resistance near 35,400. If Dow Jones fails to settle above the 35,400 – 35,550 range, it will move towards the support at 35,000 – 35,100.

For a look at all of today’s economic events, check out our economic calendar.