Earnings Season to Make or Break the NASDAQ 100….?

by John Knobel

The NASDAQ-100 is a stock market index composed of around 100 of the largest non-financial companies listed on the US Nasdaq stock market.
Over the next 30+ days most of these companies will report earnings and sales data.

Investors will look at these earnings and sales reports for information and insight into future earnings prospects and to help with investment decisions…to hold…to buy or to sell…

Earnings season could be the trigger for stock markets to continue trending higher…. or wake the bears to attempt to take control from the bulls and drive stocks lower.

Improved earnings prospects may help to support higher stock prices. While if the outlook for future earnings and sales is not so bright, this may trigger a market correction lower.

Technical analyst: NSDQ 20/03/2020

Buyers outlook: Prices trending higher towards 9,390

Bulls market rally remains in place provided the index can remain above the 8,707 support. Multi-month consecutive higher tops and lower bottoms confirms the technical uptrend until lower tops and lower bottoms can be observed on the daily chart. Long positions may be aiming for the 261.8% price extension at 9,390 from the July – August near 10% downside correction.

Sellers outlook:

Downside price supports spotted at 8,707 and 8,435.50 a break below 8,435.50 opens the potential for a move towards the 7,830-downside extension near 150% of the December – January 14th move.

Bottom line:

Provided earnings season can offer buyers reasons to keep the uptrend momentum going long positions have potential for a further +3 to +10% upside. While the bears could potentially emerge provided earnings season proves to support a trend reversal that could open prospects for a potential -4 to -14% price downside correction.

Source: Depaho Ltd. Investment Research Department / Bloomberg

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