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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Nasdaq 100 Index price averages produce 'golden cross'

While the Nasdaq 100 price is correcting in the near term, the golden cross indication suggests that a longer term bull trend could still be emerging.

Source: Bloomberg

Nasdaq 100 – Golden Cross confirms

Source: IG

A daily chart of the Nasdaq 100 (US Tech 100) highlights that the 50-day simple moving average (50MA) (green line) has recently crossed above the 200-day simple moving average (200MA) (blue line). This moving average crossover is known as the ‘golden cross’, a suggestion that a new bull trend may be emerging.

Inversely, when the 50MA crosses below the 200MA the technical analysis term associated with the occurrence is referred to as the ‘death cross’. A death cross is a suggestion that a new long term bear trend may be emerging.
The chart above marks ‘death cross’ scenarios on the Nasdaq 100 with the black arrows and ‘golden cross’ scenarios with the blue arrows. The chart shows these occurrences since the beginning of 2019.

It should be noted that the ‘golden cross’ is considered a longer-term indication of trend. Short term traders might use this in determining a bias to trades on the index i.e. looking for opportunities for long entry rather than short entry, while the longer term trend is considered up (by these metrics).

Nasdaq 100 - Further technical indications

Source: IG

The start of 2023 has seen the price of the Nasdaq 100 breaking above long-term trend line resistance (red line), before a correction from the short-term highs ensued. The correction or pullback has now taken the price into oversold territory as noted by the stochastic indicator on our chart.

In line with the longer-term bull trend, suggested by the ‘golden cross’ and the trend line break, traders might consider looking for long entry should some bullish signals confirm in the near term to support.

A short-term bullish indication might be considered should we see the price produce a strong close above the black trend line on the chart above. Ideally this trend line break should be accompanied by a sharp move out of oversold territory by the stochastic indicator.
In this scenario, 12900 and 13190 become upside resistance targets from the move, while a close below the 11665-support level might be used as a stop loss indication for the trade setup should it confirm.

Nasdaq 100 – IG client sentiment

Source: IG

As of the 2nd of March 2023, 60% of IG clients with open positions on the Nasdaq 100 expect the price to rise over the near term, while 40% of IG clients with open positions expect the price to fall.

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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