Nasdaq 100 Technical: Further potential downside pressure as key support broke

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<li><strong>Broke below a key ascending trendline on last Friday, 20 October that has acted as support for prior down moves since December 2022.</strong></li>
<li><strong>Implied volatility of Nasdaq 100 measured by the CBOE VXN Index has staged a significant bullish breakout and rallied to a 7-month high of 25.31.</strong></li>
<li><strong>Key short-term resistance to watch will be at 14,615.</strong></li>
<li><strong>Nasdaq 100’s key component stocks Q3 earnings releases to take note of; Microsoft & Alphabet (Tuesday, 24 October) followed by Meta (Wednesday, 25 October), and Amazon (Thursday, 26 October).</strong></li>
</ul>
<p>This is a follow-up analysis of our prior report, <em>“Nasdaq 100 Technical: Potential bearish reversal looms”</em> published on 11 October 2023. Click <a href="https://marketpulse.com/indices/nasdaq-100-technical-potential-bearish-reversal-looms/kwong">here</a> for a recap.</p>
<p>The <a href="https://www.oanda.com/sg-en/trading/indices/">US Nas 100 Index</a> (a proxy for the Nasdaq 100 futures) has shaped the expected bearish reversal below the 15,355 key short-term resistance on 12 October and tumbled by -6% to print a current intraday low of 14,425 in today, 23 October (European session) at this time of the writing.</p>
<p>Two key medium-term technical developments have occurred that suggest rising odds that the ongoing decline from its 19 July 2023 high of 15,938 may morph into a potential multi-month major bearish downtrend phase.</p>
<h2><strong>Implied volatility of Nasdaq 100 has hit a 7-month high</strong></h2>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-40-13.png"><img loading="lazy" class="alignnone wp-image-808278 size-large" src="https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-40-13-1024×589.png" alt="" width="700" height="403" srcset="https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-40-13-1024×589.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-40-13-300×173.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-40-13-768×442.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-40-13.png 1514w" sizes="(max-width: 700px) 100vw, 700px" /></a></p>
<p>Fig 1: US Nas 100 medium-term trend as of 23 Oct 2023 (Source: TradingView, click to enlarge chart)</p>
<p>Firstly, price actions of the US Nas 100 Index have staged a clear bearish breakdown below its former major ascending trendline from the 28 December 2022 low of 10,675 with a daily close below it last Friday, 20 October 2023. These observations suggest that its 2023 year-to-date rally may be a bearish corrective up move sequence rather than a bullish impulsive one that could propel it to a fresh all-time high level.</p>
<p>Secondly, the implied volatility of the Nasdaq 100 as measured by the CBOE VXN Index has increased significantly in the past three weeks. It cleared above its 23.85 key medium-term resistance and traded at a seven-month high of 25.31 last Friday, 20 October after being compressed to a depressed zone of 18.45 to 17.25 during the summer months of 2023. Higher levels of implied volatility tend to suggest a likely more pronounced down move sequence in the price actions of the Nasdaq 100.</p>
<h2><strong>Watch the key short-term resistance at 14,615</strong></h2>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-41-03.png"><img loading="lazy" class="alignnone wp-image-808279 size-large" src="https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-41-03-1024×589.png" alt="" width="700" height="403" srcset="https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-41-03-1024×589.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-41-03-300×173.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-41-03-768×442.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/10/NAS100USD_2023-10-23_18-41-03.png 1514w" sizes="(max-width: 700px) 100vw, 700px" /></a></p>
<p>Fig 2: US Nas 100 minor short-term trend as of 23 Oct 2023 (Source: TradingView, click to enlarge chart)</p>
<p>In today’s European session, the short-term price actions of the US Nas 100 Index as seen on its 1-hour chart have failed to reintegrate back into the minor descending channel’s lower boundary that was broken down during last Friday, 20 October (US session) now turns into a pull-back resistance at 14,615.</p>
<p>Also, the hourly RSI indicator has dipped into its oversold region (below 30) but without any clear bullish divergence condition which suggests a potential minor snap-back in price actions may occur towards the 14,530 near-term resistance rather than a more pronounced bullish reversal.</p>
<p>The next intermediate support to watch will be at 14,300 and a break below it exposes the key 200-day moving average now acting as a support at 13,960 (see daily chart).</p>
<p>However, a clearance above 14,615 key short-term pivotal resistance negates the bullish tone for a deeper snap-back towards the next intermediate resistance zone of 14,780/14,825 (the former major ascending trendline from December 2022 low and the 50% Fibonacci retracement of the current downside acceleration from 17 October 2023 minor high to today’s current intraday low of 14,425 at this time of the writing.)</p>