The Nasdaq 100 is stabilizing after breaking out of its downward channel and reclaiming the 50-day moving average (50-DMA). However, it is facing resistance near the 25,890 level, as analysts have pointed out.

Recent Movements of the Nasdaq 100

The Nasdaq 100 recently broke above a steep downward trend and regained the 50-DMA. However, it has stalled near the previous gap down at 25,890 points. There is a possibility for the index to form a small base here. Currently, the 50-DMA, around 25,200 points, acts as short-term support, which is crucial for the index to maintain its upward trend. If it manages to break above 25,890 points, the index could aim for higher levels, potentially reaching the October highs near 26,180 points and future targets around 26,600 points. The FXStreet Insights Team, composed of journalists, gathers market views from recognized experts, blending commercial notes with insights from various analysts. We see the Nasdaq 100 building a small base after its recent downtrend. It has halted just below the critical 25,890 level, which is an important resistance point from a prior gap. The market seems to be waiting for a catalyst to guide its next significant move.

Key Trading Considerations for Nasdaq 100

For bullish traders, a consistent move above 25,890 will be a critical signal over the next few days. This breakthrough would confirm the uptrend and allow for buying call options or call spreads aimed at the October highs near 26,180. The recent November CPI report shows core inflation cooling to a 2.8% annual rate, which could set the stage for a year-end rally if this resistance is overcome. However, we must keep an eye on the 50-day moving average around 25,200, which is our key support level. If the index drops below this level, it would indicate that recent gains were temporary, and we should consider using protective puts to guard against a decline. As seen in the third quarter of 2024, failing to maintain this key average can lead to a rapid drop to lower levels. With trading volumes expected to decrease as the holidays approach, the index may stay range-bound for a while. This trading environment is favorable for those who sell options, like iron condors, taking advantage of the sideways movement between the 25,200 support and 25,890 resistance. The CBOE Volatility Index (VIX) is currently around 16, indicating that traders aren’t anticipating significant short-term moves. Create your live VT Markets account and start trading now.

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