Nasdaq 100’s longer-term trend still bullish despite recent increase in volatility

THE Nasdaq 100 Index is approaching a significant technical threshold as investors navigate the intersection of strong artificial intelligence-related earnings growth and a less supportive macroeconomic backdrop. Nvidia’s Q1 FY2027 earnings, released last week, reinforced the strength of ongoing AI infrastructure spending after the company reported revenue of US$81.6 billion and an increase in its quarterly dividend.

However, the broader market response suggests that investors remain increasingly sensitive to valuation pressures stemming from higher interest rates. The 10-year US Treasury yield continues to hold near the 4.6 per cent level following recent inflation data and shifting expectations surrounding the Federal Reserve’s policy trajectory. Elevated bond yields typically weigh on growth-oriented sectors by increasing the discount rates applied to future cash flows, placing pressure on equity valuations despite continued earnings expansion.

Technical structure

On the weekly chart, the Nasdaq 100 Index is currently testing the 29,400 to 29,700 zone, derived from the index’s previous major swing structure. This area closely aligns with the upper region of the prior weekly candle, where upward momentum previously began to moderate, establishing a notable zone of overhead resistance.

In contrast to earlier sessions, momentum indicators have improved significantly. The Moving Average Convergence Divergence (MACD) indicator has turned sharply higher, with the MACD line crossing cleanly above its signal line. Meanwhile, the expansion of the positive green histogram bars points to renewed upside momentum following the earlier consolidation phase.

The broader trend structure also remains constructive. The 20-week exponential moving average (EMA), currently near 26,249.8, continues to maintain a positive separation above the 50-week EMA at 24,714.9. Both moving averages remain firmly below current price levels, reinforcing the longer-term bullish trend despite the recent increase in volatility.

Key levels ahead

A strong breakout and sustained move above 29,678 would confirm the continuation of the prevailing uptrend and place the index into uncharted territory beyond the resistance zone established during the previous weekly session.

On the downside, a rejection at current levels could shift focus back towards the 24,000 to 26,000 region which previously acted as resistance. This region represents a significant historical support area and also converges closely with the rising 20-week EMA, making it an important level for medium-term trend stability.

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For now, the technical structure remains broadly constructive, although elevated Treasury yields continue to present a meaningful macroeconomic headwind for growth-oriented equities.

The writer is manager, business development, at Phillip Nova