Nasdaq 100 forecast: Tech titans stage a comeback on temporary tariff relief

Following a surge in index futures, Wall Street opened higher as technology giants like Apple and Nvidia rallied on the back of news of a temporary reciprocal tariff exemptions on phones, computers and other consumer electronics. The major US indices were holding onto their earlier gains, although still inside last week’s ranges, suggesting traders have not been convinced that they have had the all-clear just yet. As such, it might be too early for us to change our Nasdaq 100 forecast to bullish from neutral. Perhaps volatility will ease a little this week, but with earnings from tech giants to come in the next couple of weeks, on top of all the trade war saga, anything is possible. Traders must remain nimble.

Can the Nasdaq 100 make a more significant recovery?

It remains to be seen whether this will turn into a lasting recovery, or whether the volatility will make a quick return. The news is certainly positive and follows last week’s U-turn on the wider reciprocal tariffs, which were paused for 90 days. So, we have certainly seen some positive developments on the trade war, as there is now glimmer of relief from the ongoing US-China trade skirmish. Still, the celebrations may well be tempered after Donald Trump was quick to clarify that this was no broad policy shift, insisting tariffs would still be applied to various high-tech items in his wider bid to reshape US trade terms. Commerce Secretary Howard Lutnick echoed this sentiment, framing the exemption as merely procedural – a prelude, it seems, to more targeted duties still to come.

For now, however, investors appear more focused on the reprieve than the rhetoric – and tech stocks, battered though they may be, are showing signs of renewed vigour.

Technical Nasdaq 100 forecast: Key levels to watch

Source: TradingView.com

From a technical point of view, the Nasdaq 100 forecast is far from bullish just yet, but last week’s price action has helped to alleviate the selling pressure. At the time of writing, the Nasdaq 100 was testing a major resistance area between 19,115 to 19,285, just as major techs such as Apple stock were relinquishing some of their earlier gains. As shown on the chart, this was previously a support range which turned into resistance last week. Here, we also have the bearish trend line converging with the 50% retracement level against the February’s all-time high.

A clean break above this 19,115 - 19,285 zone could potentially pave the way for a run towards the 61.8% Fibonacci level which comes in around the next zone of resistance circa 20,000.

However, if the abovementioned 19,115 - 19,285 zone holds as resistance, then the bears will remain in control, in which case we could see a possible drop to test Friday’s high at 17,733. Below that level, 18,222 is the next short-term support to watch and then nothing too obvious on the daily time frame until the August 2024 low of 17,236, a level which briefly gave way during the height of the sell-off last week.

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R