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AFTER TECH TUMBLE, NASDAQ FUTURES TRY TO STABILIZE (0900 EST/1400 GMT)
In the wake of the Nasdaq Composite .IXIC confirming a correction by ending down more than 10% from its February 12 closing high on Monday, CME e-mini Nasdaq 100 futures NQcv1 are trying to stabilize ahead of Tuesday's regular session open. The futures are quoted up more than 2%.
Recent Nasdaq weakness has come amid a tech wreck. Indeed, the S&P tech sector has fallen more than 9% from its mid-February peak. Semiconductors and FANGs have been hit even harder. The Phil SE Semiconductor Index is off nearly 15%, and the NYSE FANG+TM index has collapsed close to 17%.
Of note, the tech sector appears to have a head & shoulders top on its daily chart:
Now that it has broken the pattern's neckline, it suggests tech has further downside, despite any bounce after Tuesday's open.
Amid bubbling volatility, Nasdaq 100 futures have been gyrating. Even on strength, Fibonacci resistance levels at 12,635.47 and 12,767.75 can act as hurdles (Monday's high 12,761.25). Additional barriers are at 12,900.03 and 13,063.69/13,088.36.
Meanwhile, daily momentum remains weak. The MACD is hitting its lowest levels in 11 months.
The futures breaking Friday's low (12,207.25) can suggest further downside with the support line from late-September now residing around 11,920. The rising 200-day moving average is now around 11,695.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
