Nasdaq 100 riding bullish breakout amid mixed macro winds
Despite the positive momentum, traders are now navigating a more complex landscape shaped by both technical milestones and macro crosscurrents. Progress in trade talks over US tariffs has supported sentiment, but fresh tensions have emerged after US President Donald Trump announced additional tariffs on India over Russia-related trade and sector-specific tariffs on semiconductors - a sector that has been a major driver of the NDX rally. Markets are also keeping a close eye on the US Federal Reserve's stance for the second half of 2025, particularly regarding the likelihood of any rate cuts this year.
The April uptrend remains intact, with near-term support anchored at the 50 per cent Fibonacci retracement level of 23,268, followed by the 38.2 per cent Fibonacci level at 22,687. The 22,222 zone, previously a key resistance level, now serves as a major support zone, bolstered by the 50-day Simple Moving Average (SMA) at 22,475. These levels could be considered by investors looking to enter during any short-term correction, provided they maintain a positive outlook on the index.
On the upside, immediate resistance sits at the 61.8 per cent Fibonacci retracement level of 23,848, with the next resistance target at 24,500. The breakout above the neckline of the reverse head-and-shoulders pattern reinforces the bullish structure, but momentum traders will be alert for any signs of weakening as the index nears its all-time highs and tread into uncharted waters.
Market sentiment is currently shaped by two opposing forces. On the one hand, ongoing progress in US trade negotiations could limit downside risk if agreements are reached or tariff deadlines are extended. Furthermore, strong semiconductor demand and sustained interest in AI-related investment themes remain supportive for tech-heavy indices like the NDX.
On the other hand, new tariff measures on India and targeted semiconductor tariffs introduce sector-specific risks. Additionally, the Fed's cautious stance leaves uncertainty over the timing and scale of potential rate cuts while geopolitical tensions, including US foreign policy shifts and trade realignments, could inject bouts of volatility.
In summary, the NDX is in a structurally bullish phase, supported by strong technical underpinnings and a confirmed reversal signal. However, with resistance levels approaching and macroeconomic risk factors to consider, disciplined risk management is key. If the index manages to hold above 23,268, it could open the door to a run towards 24,500, while a break below 22,687 may signal the start of a deeper pullback.
The writer is manager, dealing and investor education, at PhillipCapital
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