Trade of The Day – US100

Facts:

• US100 has defended support around 28,430 points on three separate occasions.
• The RSI (14) on the hourly chart has rebounded from around 30 to above 40 .

Recommendation:

Long position on US100 at market price Stop Loss: 28,433 Take Profit: 29,380

Opinion:

The Nasdaq 100 futures contract (US100) remains within a descending price channel and is currently testing its lower boundary near 28,400 points . Given the strong U.S. earnings season so far, marked by a high number of positive surprises and upward guidance revisions, combined with the recent overbought conditions in the oil market following a more than 30% rally from around $70 , a rebound toward the middle of the price channel appears increasingly likely. This area also coincides with the 50-period and 200-period EMAs and a key resistance zone around 29,380 points , where two recent local highs were formed. The long recommendation, with a take-profit target at 29,380 and a stop-loss at 28,433 , is based on a combination of technical and fundamental analysis. Momentum indicators are also becoming more supportive, with both the RSI and MACD showing improving momentum and a bullish crossover. The U.S. economy continues to demonstrate resilience, highlighted by yesterday’s exceptionally low initial jobless claims, a positive signal for technology companies that may continue to maintain pricing power. Importantly, many large-cap technology stocks remain well below their recent highs, with companies such as Alphabet still trading more than 20% below their peak levels . Semiconductor stocks have also undergone a meaningful correction, even as the world’s largest hyperscalers continue to increase, rather than reduce, their planned AI infrastructure spending. Alphabet, which reported earnings on Wednesday, raised its capital expenditure guidance for this year, reinforcing confidence in AI-related investment trends. As a result, both momentum and fundamental factors increasingly favor a short-term rebound. The primary downside risk remains the oil market, where another sharp rally could renew inflation concerns and pressure growth-oriented equities. We therefore recommend a long position on US100 with the specified take-profit and a relatively tight stop-loss to protect against a potential bearish breakout below the lower boundary of the descending channel.

Source: xStation5

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