Focus on Opportunities of Buying at the Lows with Selling Pressure Abating

Summary:

The Nasdaq faces significant technical correction pressure in the short term. However, the long-term thesis for technological sector upgrades remains intact. It is recommended to monitor for a rebound opportunity following a full correction.

BUY USNDAQ100

Close Time

CLOSED

19440.80

Entry Price

20400.00

18800.00

28542.85 -54.40 -0.19%

2517.5

Pips

Profit

18800.00

19692.55

Exit Price

19440.80

Entry Price

20400.00

Fundamentals

The market is currently centered on the Federal Reserve's March meeting, with widespread expectations for unchanged interest rates, although expectations for rate cuts within the year have diminished. Inflation data, including CPI and PCE, remains above the 2% target, and the high-interest-rate environment is pressuring tech stock valuations. The Nasdaq 100's current valuation is significantly above its historical average, and the sell-off in U.S. stocks reflects some profit-taking at elevated levels.

Furthermore, recent earnings reports from major components like Nvidia and Microsoft indicate continued high growth in AI computing power demand, but some companies' profit growth has slowed, leading to increased market divergence on the future growth momentum of the "Magnificent Seven". Coupled with U.S. tariff policies that have heightened market concerns about escalating global trade friction and economic recession, market risk aversion has increased, necessitating caution regarding the risk of a systemic correction in U.S. stocks.

However, Trump has attributed the stock market decline to external factors, downplaying market volatility and denying recession risks. The U.S. previously announced a 50% tariff on Canadian steel and aluminum products, but withdrew it within six hours, subsequently partially exempting goods covered by the United States-Mexico-Canada Agreement, though a large number of goods still face a 25% tariff. The policy reversals have intensified overall market volatility, but the accelerated sell-off in U.S. stocks has somewhat relieved selling pressure, and valuations of AI computing power and semiconductor leaders have been restored. In the short term, opportunities of buying at the lows and rebound after a full correction can be considered.

Technical Analysis

Focus on Opportunities of Buying at the Lows with Selling Pressure Abating_1

In the 4H timeframe, the US100 has experienced a significant downturn from its recent peak, breaching the 20,000-point threshold. The magnitude of this decline is now comparable to the correction observed in July of the previous year. In the short term, the US100 is approaching the lower boundary of a parallel channel, with the Relative Strength Index (RSI) indicating severely overbought conditions, suggesting a potential for a near-term rebound.

It is recommended to go long with small positions around 19,400, with the target near the resistance of 20,500 and a stop-loss below 19,000.

Trading Recommendations

Trading Direction: Buy

Entry Price: 19400

Target Price: 20400

Stop Loss: 18800

Support: 19000/18400

Resistance: 20500/22000

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