The Nasdaq 100 futures fell around 1.7% the other day. The overcrowed AI trade is losing momentum as yields press higher. The key question is whether this is just a temporary respite before new highs are seen, or whether this marks the beginning of something more meaningful this time, writes Fawad Razaqzada, technical analyst at TradingCandles.
If the rally in crude oil or bond yields is not stopped, a period of market turmoil cannot be ruled out. While it is too early to declare the end of the bullish trend, the risks of a correction are rising for the Nasdaq 100.
Nasdaq 100 Futures
The index has turned lower after again failing to hold sustainably above the 30,000 level. Here, a bearish trend line also offered resistance. With the next support at 29,850-ish also taken out, this will now be the first level of resistance to watch in case we see a rebound.
The next support is at 29,180-ish, a prior resistance level. Below that we could see a more meaningful drop, possibly towards 28,190-ish.
With oil prices rising, bond yields climbing, and geopolitical risks still elevated, equities may find it increasingly difficult to ignore the pressure coming from the macro environment.
