Nasdaq 100 forecast: Technology stocks rally ahead of Tesla results

We have seen a noticeable rise in risk appetite following the plunged on Monday when most western markets were closed for Easter. But today’s recovery has been a strong one with the Nasdaq powering 3% higher and decent gains seen elsewhere. The gains come after a choppy last week, when global markets finished mixed, with Europe showing further signs of stabilisation while US indices ended lower. The fact that we have seen more gains for Europe post Easter is a further sign that investor sentiment has improved compared to a few weeks ago when trade war concerns were at the forefront. Investors have not been so keen on US assets. But there is hope that there is progress in trade talks with some of the US trade partners, including India and Japan. However, let’s not get carried away: sentiment remains jittery as the market continues offering up a vote of non-confidence, via the recent dollar selling, in Trump’s economic policy. Adding to the concerns is Trump’s public anger towards Jerome Powell’s decision not to cut rates. The Fed Chair poured cold water on expectations of aggressive monetary support, stressing a more measured, wait-and-see approach. Concerns about a deteriorating growth outlook amid trade war risks means the Nasdaq 100 forecast is remaining not so certain. Another choppy week could be ahead of us, as attention turn to more company earnings, with Tesla set to post its results after the close.

Earnings in focus: Tesla set to report results after bell

Tesla and Alphabet are among the first of Magnificent 7 megacaps set to report their results, with earnings from the former coming in after the bell tonight. We will also hear from IBM, SAP and Intel, as well as the likes of Texas Instructions, Boeing, Merck, and PepsiCo. The result of these stocks could impact the Nasdaq 100, at least in the near-term.

So, all eyes will turn to Tesla after the bell today, as the electric carmaker gears up to deliver its first-quarter earnings. The shares are enjoying a modest reprieve today, up nearly 6.5% intraday. Still, let’s not gloss over the bigger picture—Tesla remains down around 40% year-to-date, with growing unease over Elon Musk’s increasingly high-profile involvement in federal matters fuelling broader concerns. Anyway, Tesla’s earnings are expected at $0.41 per share on revenue of $21.27 billion.

Corporate news

Elsewhere on the stock front, shares in 3M jumped after the industrial stalwart stuck to its full-year outlook, even as it gave a polite nod to new risks emerging from trade tensions. Investors, for now, seem content to take that on the chin. However, results or earnings forecasts from companies such as Northrop Grumman, a defence contractor, RTX Corp, another name in the aerospace and defence world, and Verizon Communications, all failed to cheer.

All in all, it has been a mixed session so far, with optimism in mega-cap tech contrasting with more sobering signals from the industrial and telecoms sectors. The real test, however, comes after hours—when Tesla reveals whether it still has charge left in the tank.

Global PMIs due on Wednesday

While the US economic calendar is quiet this week, we still have a number of important global data to look forward to in a holiday shortened week. It remains to be seen though whether the upcoming data releases will impact the Nasdaq 100, given that all attention remains on tariffs and trade uncertainty. Chief among the data highlights for this week are Global PMIs, set for release tomorrow. We will get the latest Purchasing Managers’ Indices from around the world, with European ones likely to garner most of the attention. Let’s see if Trump’s trade war has already impacted business activity around the world. In Europe, Manufacturing PMIs have been improving ever so slightly, but still remain below the expansion threshold of 50.0. Many economists are expecting recovery to slow in the months ahead amid trade war uncertainty, before the impact of the big German fiscal stimulus measures come into play.

Technical Nasdaq 100 forecast

Source: TradingView.com

Despite today’s sharp recovery, the trend on the Nasdaq 100 is still not confirmed as bullish given the recent struggles. Until such a time we move back above the short-term bearish trend line, any bounces like today’s one should be taken with a pinch of salt. At the time of writing, the Nasdaq 100 was testing a potential resistance area around 18,3100, marking Friday’s close. Above here, we have 18,673 marked as the next potential resistance zone. Should the selling resume later in the week, the next support is seen around 17,465 followed by 17,236. A lot will now depend on the direction of tech shares, especially Tesla stock with the carmakers results due after the bell.

Strategy: Stay Flexible, Trade the Levels

In a market where headlines drive swings and conviction remains scarce, flexibility is everything. The most valuable trading tip right now? Don’t marry a direction. Focus on trading level-to-level, keeping your bias in check and your risk tight.

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R