The NASDAQ index is currently performing well, leading major US stock indices with a gain of 1.06%. It is up by 224 points, trading at 21,140.07. On Friday, the index dropped sharply, falling below its 200-hour moving average for the first time since April 24. This decline also pushed the price below the 38.2% retracement level, reaching 20,650.10, from the rally that started on June 23 and peaked on July 31.

Market Opens Higher

Today, the market opened higher. It has risen above the 100-hour moving average of 21,020.24 and the 50-hour moving average of 21,043.28. Staying above these levels indicates a positive outlook. When the 200-hour moving average is breached, it signals bearish trends. The support level is found at the 38.2% retracement level of 20,650.10. The 100-hour and 50-hour moving averages give us support and resistance levels at 21,020.24 and 21,043.28, respectively. In other news, the US Treasury plans to auction $42 billion in 10-year notes, yielding a high of 4.255%. Meanwhile, European indices finished higher, with Spain’s Ibex leading the way. Given the NASDAQ’s current strength, we see a clear short-term bullish signal for the upcoming weeks. The index has recovered its 50-hour and 100-hour moving averages following a brief dip last week. This suggests that the upward trend that started in late June is still strong.

Opportunities for Traders

For traders in derivatives, now is a good time to consider call options on the NASDAQ 100 (NDX) or related ETFs. The 100-hour moving average, at around 21,020, is a key level to monitor. As long as the index stays above this mark, a bullish outlook remains, making it a sensible area for placing stops on long positions. This optimism is backed by solid fundamentals. The latest Consumer Price Index (CPI) report for July 2025 showed inflation cooling to 2.9%, which exceeded expectations. This reduction in price pressure provides the Federal Reserve more flexibility, which typically benefits growth-oriented tech stocks. Additionally, the job market showed strength with 215,000 non-farm payrolls added in July 2025. However, there are risks to consider. Geopolitical tensions are rising, with discussions about a potential 15-20% tariff on all EU goods and instability in the Middle East. These issues could dampen market sentiment and lead to a move towards safer assets, so we need to keep a close eye on them. The high yield from the recent 10-year Treasury note auction, at 4.255%, may also act against the market. Attractive yields on secure government debt can draw investment away from stocks, particularly in the high-valuation tech sector. The CBOE Volatility Index (VIX) is still low at about 14, but it has increased from summer lows, indicating some traders are seeking protection against a possible downturn. Given these mixed signals, a cautious strategy could involve combining long call positions with less expensive, out-of-the-money put options as a hedge. If the NASDAQ cannot maintain its position above the moving averages, especially the 21,020 level, that would indicate the recent strength is weakening. It would then be wise to reduce bullish positions and prepare for a possible move back to the 20,650 support level. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now